There was fear, anger and panic at Yes Bank branches after the government put a curb on withdrawals to Rs 50,000. This debacle has affected scores of fintech companies as well. These companies use Yes Bank's API banking services and also hold nodal accounts.

Many fintech players alerted their customers about the disruption in their services and that they were working on setting it right. PhonePe, which offers UPI payments with Yes Bank as a service provider, was among the big players to get hit.

Its services have been down since Thursday night. CEO Sameer Nigam said, on Startup Street, the company is working on multiple options to get the service back again.

Also, tweets have been pouring in from various fintech founders about the impact and offering assistance to those who have been impacted. There was also a Twitter spat when Paytm invited PhonePe to use Paytm Bank, and a repartee from PhonePe.

CNBC-TV18 caught up with Vishwas Patel, chairman of the Payments Council of India, Subramanya SV, co-founder of wealth-tech startup Fisdom, Pratibha Jain, head-Delhi of Nishith Desai and Bala Parthasarathy, CEO and co-founder of MoneyTap, to understand the nature and scale of impact.

On CC Avenue, Patel said, “From CC Avenue perspective, yes we are impacted. From morning there was no clarity whether the settlements are going to come in. Most of the banks delayed the settlement and specifically from Yes Bank perspective, all the net banking transaction settlements has not come in."

"It is a couple of crore rupees; just yesterday’s transaction has been settled."

"Fortunately our nodal and UPI was not on Yes Bank, but a lot of settlements have been delayed which created a nightmare of sorts at our end because at one hand we have to handle thousands of merchants and on other side continuous follow up with different banks because even banks were assessing what is their exposure to Yes Bank."

"We had work overnight also to block Yes Bank net banking as a payment option.”

Patel said there will be a significant impact on the payments space.

“From Yes Bank perspective, almost 40 percent of UPI transactions were done through Yes Bank meaning that both acquiring and issuance on the part with different handles was being done by the bank."

"My estimate is let us say around Rs 1,000 crore a day bare minimum across all our members, PhonePe is significantly impacted."

Their services are still down but they are working hard through the night and day now, he added.

"I believe some folks are there at RBI also right now. Also, BharatPe and a lot of merchants who solely relied on Yes Bank as a nodal bank are impacted.”

Speaking about the impact on Fisdom, Subramanya SV said: “We have been using Yes Bank as a nodal account for all the money that we get from our customers and so all the transactions, all the inflows from the customers for all the transactions that happened yesterday and day before yesterday, that money was with our nodal account that is with Yes Bank."

Once the transactions were blocked, all the associate APIs and other software that Fisdom had built around that stopped working, he added.

So, the customers’ money was stuck in the nodal account that the payments company had with Yes Bank, according to him.

First Published:Mar 6, 2020 11:22 PM IST