Digital Payment Network: According to the recent reports, RIL is in advanced stages of submitting their proposal to the Reserve Bank of India (RBI) for setting up anentity for retail payments, to rival the National Payments Corporation of India (NPCI) and to help with the sudden concentration of users in this digital payment cloud.
The New Umbrella Unit (NUE) will jointy be pursued by Reliance, Infibeam’s subsidiary So Hum Bharat, Facebook and Google. Although Facebook and Google will be a minor stakeholder in the NUE.
The Forging of new umbrella identities (NUEs) was initiated by the Indian’s central bank to create a parallel payments network, which would rival the present system, operated by the National Payments Council of India, as they seek to provide an option to the users in case of a crisis with the present system.
Digital Payment Network – A Bit About NPCI
National Payments Corporation of India was set up way back in 2008. NPCI, as being a government company, is a not-for-profit company.
The organisation is owned by a group of banks, and has been promoted by the country’s central bank. It looks after billions of dollars of payments everyday via various services offered by it i.e, ATM transactions, interbank fund transfer and digital payments.
And the number of digital payments in India could rise to $135.2 billion in 2023. So to handle such a huge number of transactions, without any downtime or lag, the government is wanting to add more players to the game.
After the submission of proposals by various private companies, RBI is expected to take another six months to study all the proposals and that it is not expected to give more than two new “for-profit” NUE licences.
What Does NUE bring to the table?
NUE licence to help in increasing a greater autonomy in Digital Payment Network
An NUE licence will help the organizations to have greater autonomy in processing digital payments in India.
This will help establish a firm presence in the financial services ecosystem through value-added lending and insurance services.
Currently, Google’s Google Pay platform and Facebook-owned WhatsApp’s payment service that are providing services through UPI, but are treated as intermediaries or third-party players by Indian law rather than licensed payment system operators.
According to the reports, various other parties interested parties in the fray include a group led by Amazon and ICICI Bank, another combination bidding for the NUE is conglomerate Tata Group and HDFC Bank, and also a venture initiated cordially by India’s largest mobile payment platform, Paytm, domestic ride-sharing company Ola and IndusInd Bank.