The month-long moratorium on YES Bank will have a significant impact on the fintech sector in the country, as scores of fintech players were using the bank's API banking services and also held nodal accounts there. Other players in the digital ecosystem that were using the bank's API services will also see a partial impact.

One of the biggest impacts could be on the stellar UPI payments story, which stood at 1.32 BN transactions in the month of February, with the total amount transacted standing at Rs 2,22,516 crore.

In its investor presentation for Q2FY2020, YES Bank said it had about 40 percent market share in the number of UPI transactions, having processed over a billion transactions in the quarter. Sources say YES Bank's market share is now over 40 percent, largely driven by PhonePe, which itself claims a market share of 40 percent.

Among banking players, YES Bank works with the largest number of UPI third-party apps, with players such as MakeMyTrip, Flipkart, RedBus, Phonepe, Airtel, Udaan, as per the NPCI website.

However, some of these players such as Airtel have said they no longer work with YES Bank.

The YES Bank moratorium will thus impact UPI payments on these platforms.

Fintech player PhonePe seems to be the most impacted. Its services down since Thursday night and CEO Sameer Nigam has said they are working on multiple options to get the service live again.

Dilip Asbe, CEO of NPCI which runs the UPI infrastructure, said he did not want to comment. YES Bank has not responded to queries by CNBC TV 18.

In its presentation, the bank had also said that it had a 41 percent market share in Aadhar Enabled Payment Services (AePS) by transaction value.

Apart from the fintech players, YES Bank also said in the presentation that its customers for API banking included Amazon, Ola, Oyo, Swiggy, Zomato, and several other digital platforms, which would have been impacted as the bank's services have been hit.

Stock brokerage platform Zerodha tweeted on Friday said they have cancelled all withdrawal requests made by clients to YES Bank accounts.

Largely, fintech players using YES Bank for nodal and escrow accounts are hit, including neobanks such as Niyo, investment tech startups such as Fisdom, as well as several payment gateways and lending companies which used the banks eNach services​.

First Published:Mar 6, 2020 12:14 PM IST