Paytm on Tuesday said it is applying for NUE (New Umbrella Entity) in a consortium with players including ride hailing platform Ola, as part of its efforts to develop more innovative and inclusive digital payments solutions for the Indian population.
Speaking to PTI, Paytm founder and Chief Executive Officer Vijay Shekhar Sharma said the company sees the NUE system to play out as a great opportunity for payments in the country.
"We've been saying that payments have become mainstream, and it is important for us to create more payment options and opportunities for consumers and businesses alike. RBI took a note of it and has given an opportunity to apply for NUE. We are going to apply for sure…the process is on," he said. Asked if Ola was a part of the consortium, Sharma said it will include Ola as one of the key partners.
"It (consortium) will include a bank, small finance bank, payments bank, fintech company, tech company, NBFC – one of the most diverse NUE consortiums that we will see," Sharma said but declined to provide additional details. Ola did not respond to e-mailed queries. Ola did not respond to e-mailed queries.
In August last year, RBI had released a framework for authorisation of an umbrella entity for retail payments in the country and had invited applications from desirous entities by February 26, 2021. After requests from various stakeholders including Indian Banks' Association for extending the deadline in view of the pandemic, the Reserve Bank of India had extended the deadline to apply for NUE to March 31.
NUEs will be set up as a company as a for-profit under the Companies Act, 2013 and will get authorisation under the Payment and Settlement Systems Act, 2007 (PSS Act). Such entities will undertake tasks such as setting up, managing and operating new payment systems in retail space.
These activities include but are not limited to ATMs, White Label PoS; Aadhaar based payments and remittance services; newer payment methods, standards and technologies; monitor related issues in the country and internationally; taking care of developmental objectives like enhancement of awareness about the payment systems.
They are also expected to operate clearing and settlement systems for participating banks and non-banks, and carry on any other business suitable to further strengthen the retail payments ecosystem in the country.
According to reports, several companies have partnered with banks and major tech players to apply for NUEs. Reports suggest that Reliance Industries, along with Facebook and Google which have invested in Jio Platforms are planning to apply, while Tata Group has joined hands with HDFC Bank, Kotak Mahindra Bank, MasterCard and Bharti Airtel.
Amazon is also said to have tied up with Visa, ICICI Bank, Axis Bank and fin-tech startups BillDesk and PineLabs for the NUE licence. However, these could not be independently confirmed. Sharma said NUE will provide an opportunity to create more payment systems that can be scaled.
"We see it as an opportunity to serve a large Indian population with more innovative, more inclusive payment options… We believe that we can play a role in that. So, we see this as an opportunity to be a catalyst in scaling of payments in this country," he added.Disclaimer: “Reliance Industries Ltd, which own Jio, is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.”