PhonePe has decided to surrender its Account Aggregator (NBFC-AA) licence to the Reserve Bank of India almost 18 months after after getting the licence.

The fintech giant plans to exit the account aggregator (AA) space, and said it will partner with other AAs to "enhance financial inclusion."

PhonePe entered the AA space in June 2023. PhonePe had big plans to use its AA licence in the B2C space -- unlike the other existing AAs who mostly operate in the B2B space.

"We strongly believe that growing the AA ecosystem is very important to addressing financial inclusion properly. By 2022, the AA ecosystem was still very nascent and early adoption numbers were still low. So, in June 2023, we got our own AA licence in a bid to build our own Account Aggregator platform and help accelerate the AA ecosystem’s growth. This was a departure from our usual strategy of building only end consumer (B2C) products," PhonePe said in its statement.

PhonePe onboarded nearly 5 crore users. However, it could not integrate as many financial information providers (FIPs) as initially planned due to competing business priorities.

"Due to competing priorities, we have not been able to onboard as many FIPs to our platform as we would have liked. The good news is that the AA ecosystem itself is flourishing today, and many of the other players are growing exponentially. Therefore PhonePe Group has decided to exit the Account Aggregator business, and instead we will partner with other AAs in the market," the firm added.