Paytm, Ola Financial Services and IndusInd Bank will submit a joint proposal to set up a New Umbrella Entity (NUE) for retail payments in the country, the Economic Times reported. While Paytm’s Vijay Shekhar Sharma will play a significant role in the consortium, Centrum Finance, Zeta Pay and Electronic Payment and Services are also expected to pick up minor stakes in the proposed NUE entity, the report said citing unnamed sources.
While Paytm has an e-wallet which is integrated with multiple payments channels, including Unified Payments Interface, FASTag and Bharat Bill Payments, it also has a payments bank license for Paytm Payments Bank. Ola Financial services on the other hand has partnered with credit card companies and payment gateway providers to offer their customers all types of financial products for their ride-sharing service.
According to data from the National Payments Corporation of India (NPCI), Paytm processed 280 million UPI transactions worth Rs 33,909 crore on its app, while the payments bank remitted a total of 368 million UPI transactions, in January 2021. IndusInd Bank processed 26.5 million UPI transactions overall, while its app processed 1.82 million UPI transactions worth Rs 367.77 crore.
According to the RBI’s NUE guidelines, the new license holder to operate and develop retail payments platforms can be profit-making unlike the NPCI which is currently a not-for-profit entity. The NUE is expected to develop interoperable payments solutions, that can work with the NPCI’s existing payments platforms, to help grow digital payments in the country by attacking new use-cases and target markets. The RBI has invited applications which will be evaluated by an expert committee, after which the Board for Regulation and Supervision of Payment and Settlement Systems will take a final call on granting licenses, within a six-month period. The NUE guidelines state that the license holder will need to create new solutions for ATM networks, point-of-sale (PoS) services, Aadhaar-based payments and remittances.
Apart from the Paytm-Ola-IndusInd Bank combine, Navin Surya’s So Hum Bharat Digital and Reliance Industries will submit joint application for a NUE license along with a consortium led by the Tata Group and another consisting of Amazon-ICICI-Bank-Axis Bank.
Application deadline extended: On Friday, the Reserve Bank of India (RBI) extended the deadline for submitting applications for an NUE license to March 31 this year, from February 26. “Requests have been received from various stakeholders including Indian Banks’ Association for extending the timeline, keeping in view the COVID-19 related disruptions and inconveniences. It has been accordingly decided to extend the timeline,” the RBI said.
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