Amazon, Axis Bank, ICICI Bank, and Visa are planning to set up a New Umbrella Entity (NUE) along with fintech startups BillDesk and Pine Labs to create a new national payments network.
India’s fast-growing digital payments ecosystem is at present captured by the National Payments Corporation of India (NPCI).
The Amazon consortium’s NUE is looking to compete and build a settlements system that will be similar to the NPCI’s unified payments interface (UPI), aimed at consumers, merchants, and small and medium enterprises, sources told The Economic Times.
Moneycontrol could not independently verify the report.
The sources added the proposal is likely to be presented to the Reserve Bank of India (RBI) before February 26, which is the deadline to submit bids for NUEs.
All firms in the consortium will have “near-identical stakes with slightly varying rights,” they added.
One source, directly involved in the plan said the “attempt is to create a world-class payments network which can reduce settlement time for small businesses and merchants.”
They added: “Discussions largely gained momentum over the last two months. All the requisite agreements and paperwork between players are in place.”
Amazon, Axis Bank, BillDesk, ICICI Bank, Pine Labs, and Visa did not respond to queries, the report said.
The reason for the partnership, another source said, is to “maximise synergies” by bringing together India’s top private banks, fintech companies “to create a faster and scalable settlement system in India.”
Guidelines for-profit NUEs were released by the RBI in August 2020 to “foster competition and de-risk” India’s digital payments ecosystem. It allows for new consortiums to launch instant payment networks parallel to UPI
With India’s digital payments sector booming at an annual rate of 55 percent in the past five years, the coronavirus accelerating adoption, and with other big market China blocking foreign players, companies such as Amazon, Facebook, Google, and Walmart are jockeying for a piece of the pie.
As of now, Infibeam Avenue, Tata Group, and Yes Bank, among others, are learned to considering an application for NUE.