PolicyBazaar collaborates with Paytm for NUE licence
Digital transactions in India are processed by NPCI, a non-profit backed by more than 50 retail banks, which created the popular Unified Payments Interface (UPI), a mobile-based platform that enables bank-to-back transfers.
Policybazaar will partner with Paytm, Ola, IndusInd Bank and a handful of other companies to seek an RBI licence to set up a new umbrella entity (NUE) and build a national payments infrastructure company on the lines of the National Payments Corporation of India (NPCI).
The consortium is called Foster Payment Network.
What’s an NUE? Digital transactions in India are processed by NPCI, a non-profit backed by more than 50 retail banks, which created the popular Unified Payments Interface (UPI), a mobile-based platform that enables bank-to-back transfers.
Last year, the RBI said it would consider applications from groups of companies to set up NUEs, which would be for-profit versions of NPCI. These NUEs will be able to set up competitors to UPI, among other things, and reduce the “concentration risk” that comes with having one dominant payments platform. Under the RBI’s rules, any platform they set up will have to be compatible with UPI.
Details: Three Paytm Group entities and Mumbai-based Electronic Payment and Services (EPS) are expected to co-promote Foster and together own over 50% of the NUE. Policybazaar, Ola Financial and IndusInd Bank may pick up non-controlling stakes of less than 10% each.
- The consortium is in the final stages of reviewing its proposal before presenting its bid to the RBI ahead of the March 31 deadline.
Competition: Foster will face stiff competition for an NUE licence.
ET was the first to report that Tata’s consortium Ferbine, backed by HDFC Bank, Bharti Airtel, Koak Mahindra Bank and Mastercard, is also in the fray.
The other consortia vying for a licence are:
- Amazon, Visa, ICICI Bank Ltd, Axis Bank, Pine Labs and BillDesk.
- Reliance Industries, Google and Facebook.
- Tata Group, Mastercard, Bharti Airtel, HDFC Bank and Kotak Mahindra Bank.
- Financial Software and Systems, Indian Bank, Central Bank of India, National Bank for Agriculture and Rural Development and India Post Payments Bank Ltd.