Reliance Industries Ltd has partnered with Google and Facebook to seek a license to set up a New Umbrella Entity (NUE) for retail payments in the country, the Economic Times reported. Reliance, Google and Facebook will team up with So Hum Bharat Digital Payments Pvt Ltd to submit their proposal to the Reserve Bank of India (RBI), the report said citing unnamed sources.
So far, apart from the So Hum and Reliance joint application for a NUE license, a consortium led by the Tata Group and another led by Amazon-ICICI-Bank-Axis Bank are reportedly in the running to apply for an NUE license, in addition to a consortium led by Paytm, Ola and IndusInd Bank.
While Reliance has a payments bank license for Jio Payments Bank, Google has a retail payments product, Google Pay, on the Unified Payments Interface (UPI) and Facebook’s UPI service is through WhatsApp Pay. According to data from the National Payments Corporation of India (NPCI), Google Pay processed over 850 million UPI transactions worth Rs 1.77 lakh crore, while WhatsApp Pay processed 560,000 UPI transactions worth Rs 36.4 crore in January 2021. Jio Payments Bank and its apps processed 410,000 UPI transactions worth around Rs 28 crore last month.
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 the digital payments pie in the country by attacking new use-cases and target markets. While the RBI has invited applications till the end of February 2021, an expert committee will evaluate the applications 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.
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