Top Indian conglomerates and FinTech firms are eyeing a piece into India’s rapidly evolving digital payments industry. These players are applying to join the New Umbrella Entity (NUE) floated by the RBI that will see the rapid transformation in the digital payments space.
Reliance Industries, India’s telecom giant and the country’s largest conglomerate, has joined hands with FinTech firm Infibeam along with Facebook, Google, to set up a nationwide digital payment network. Led by Asia’s richest man Mukesh Ambani, Reliance is looking to get a slice of India’s fastly evolving digital payments market.
The Indian Central Bank – Reserve Bank of India (RBI) – is also looking to reduce concentration risks in the space. As a result, it has invited companies to form new umbrella entities (NUEs) to create payment networks that can rival the ones created by the National Payments Council of India (NPCI).
Reliance Digital Payment Network
The New Umbrella Entity (NUE) will see joint promotion by Reliance and a subsidiary of Infibeam Avenues Ltd. Google and Facebook who did a sizeable investment in Reliance Jio last year will small stakeholders in the NUE license. Reports suggest that industry veteran Navin Surya will be the chief executive and managing director of the NUE. Mr. Surya is well-known in India’s digital payments industry as the former Itzcash founder.
The new umbrella entity will also participate in Reserve Banks’ payment and settlement systems. Last year, the regulator said the NUE participants can also open current accounts with the RBI if required. Three sources familiar with the recent developments said that Reliance and Infibeam are in the advanced stages of submitting their proposal.
Top Corporates See Huge Opportunity in India’s Digital Payment Market
As India’s digital payments industry is under transition, top corporates see a huge opportunity in it. Big-tech giants, fintech firms and banks are now seeking a license to set-up an NUE. Companies like Amazon and Paytm have shown interest in the new payments entity.
India’s top banking players like ICICI, HDFC, SBI, BoB, Kotak Mahindra, Axis, and Yes Bank have also joined hands for an India-wide umbrella entity in retail payments. The RBI has also extended the deadline for submitting NUE applications until March 31st this month. Citing confidentiality matters, an Infibeam spokesperson has declined to comment.
India’s digital payments landscape will undergo a huge transition in the next decade. As per the Assocham-PwC India study in 2019, digital payments in India can rise to $135 billion by 2023.
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