Why all biggies are racing for NUE including Reliance, Tata, Paytm, Google, FB ?
In a boost to India's digital payments space, four consortiums have shown interest in new umbrella entities (NEUs). Top Indian business houses and global e-commerce firms have shown their interest in floating new umbrella entities for payment systems and are set to apply with the Reserve Bank of India (RBI) ahead of the 31 March deadline.
The new digital payments buzz Reliance, Tata, Paytm, Google, FB are all chasing, a question is on and why there's an interest. New umbrella entities can be set up as for-profit or not-for-profit companies that will be allowed to undertake a host of activities in the retail payments space.
According to the guidelines, these entities can offer a host of retail payment services including setting up of ATMs, offering white-label, point of sale terminals, Aadhaar-based payments and remittance services, and develop newer payment methods. They can also operate clearing and settlement systems for participating banks and non-banks.
At the present environment, many retail payment networks are coming under the aegis of the National Payments Corporation of India (NPCI). For instance, the popular Unified Payments Interface or UPI, the Immediate Payment Service or IMPS, Bharat Bill Pay and the Aadhaar-enabled system are some of the retail payments operated by the NPCI.
NPCI is, however, incorporated as a not-for-profit company and is owned by many state-owned and private banks. RBI proposed setting up more of such entities to encourage competition and to offer more retail payment solutions to customers.
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