Being a conduit for 70% of India’s digital payment volumes is no mean feat. From cheques to ATMs to IMPS IMPS Immediate Payment Service IMPS is an instant payment inter-bank electronic funds transfer system in India transactions to Rupay Rupay Rupay NPCI's card network that competes with Visa and Mastercard to UPI UPI Unified Payments Interface UPI is a instant real-time payment system , the country’s retail payments body, the National Payments Corporation of India, (NPCI) handled 4.3 billion transactions worth Rs 19,90,000 crore ($267.5 billion), for the month of March 2021 alone. This is according to a senior industry executive associated with the national payments body.

And all of that spread over 11 different payments products under NPCI’s umbrella.

Such eye-popping numbers also mean that the NPCI holds a majority of the country’s digital money flow in its hands. A fact that India’s central bank, the Reserve Bank of India (RBI), probably thought about seriously when it decided that it needed needed Economic Times RBI drafts New Umbrella Entity guidelines, for Retail Payment systems Read more alternatives. In February 2021, the central bank even released a set of draft guidelines, inviting applications from companies and promoters to set up New Umbrella Entities (NUEs).

There are plenty of takers for this idea. Except, not exactly in the way RBI seems to have imagined.

Over the last 14 months, some 30 companies in India have been wanting in on India’s payments infrastructure story. They grouped together into six six Economic Times Six consortiums apply to RBI for NUE licence for retail payments Read more consortiums, some of them led by some of the biggest enterprises in the country—Tata Group, Reliance Industries, ICICI Bank and Axis Bank, payments infrastructure provider FSS, Paytm*. All six have sent in applications to become an NUE; two are expected to win an in-principle nod in the coming six months.

But the RBI primarily wants new ideas; it’s looking for entities that have a plan to take digital payments beyond the 100 million. However, The Ken has learnt from conversations with at least seven executives part of the aspiring payments networks that the consortiums’ first order of business would be to replicate the incumbent’s products.

For one, the entities believe that this is one way to reduce the risk of concentration in NPCI.


Arundhati Ramanathan

Arundhati is Bengaluru-based. She is interested in how people use money in the digital age and how new economies will take shape based on that interaction. She has spent over 10 years reporting and writing on various subjects. Previous stints were at Mint, Outlook Business and Reuters.

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