Ola Financial, Paytm and IndusInd Bank are planning to apply for a New Umbrella Entity (NUE) license to set up a domestic payments network similar to the National Payments Corporation of India’s (NPCI) unified payments interface (UPI).
Others expected to be part of the group include Zeta Pay, Electronic Payment Services (EPS), and Centrum Finance, with Paytm likely to “play a leading role” and Ola and IndusInd also having “significant stakes,” sources told The Economic Times.
Moneycontrol could not independently verify the report.
The consortium will submit its proposal to the Reserve Bank of India on February 26 (today), sources added. The date is the deadline to apply for NUEs.
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Key differentiator for this consortium, unlike others who applying for NUE licences a source said is “diversity and technology.” Adding: “They understand consumers better and have successfully delivered national-level complex businesses leveraging technology. India's digital payments boom requires robust multiple payment products for the next level of growth," the source added.
EPS, Centrum, IndusInd, Ola, Paytm, and Zeta Pay did not respond to queries, the report said.
Another source said Paytm’s dominant position in India’s payments segment and IndusInd’s presence in small Indian towns could mean the group’s network “can be focused on semi-urban and rural acceptance.”
It was earlier reported that 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. Apart from them, Infibeam Avenue, Tata Group, and Yes Bank, among others, are learned to considering an application for NUE.
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.