Vijay Shekhar Sharma, Paytm founder and CEO, has said that his company’s new umbrella entity (NUE) will stand apart from likeness because of its diversity of partnerships with players in the financial services and technology sectors. 

Paytm announced its NUE proposals at a Paytm for Business event yesterday (March 09, 2021). It has knotted up with Ola Financial Services, IndusInd Bank, Suryoday Small Finance Bank, non-bank lender Centrum Finance and fintech companies Zeta Pay and Electronic Payment and Services (EPS) for the same. 

The association, like others, will present a proposal to the Reserve Bank of India (RBI) for setting up an NUE. Speaking about this group, Sharma was quoted , “Our consortium has a big commercial bank, a small finance bank, a payments bank, two NBFCs, a fintech player and an ATM service provider. There is every kind of representation. Our approach will be extremely inclusive, focused on scaling payments in India.”

Visualized as an incumbent to NPCI, NUEs will be permitted to set up, manage and operate new payment systems, especially in the retail space, comprising but not limited to regular and white-label ATMs, point-of-sale (PoS) devices and Aadhaar-based payments and allowance services. These entities will not rival NPCI but complement its efforts towards widening access to digital payments and making cashless transactions more secure. 

Besides Paytm, at least three other consortiums, headed by the Tata Group, Amazon and Reliance are also throwing their hats into the NUE ring. 

Mukesh Ambani-led Reliance Industries is said to be teaming up with investors Google and facebook, along with Infibeam Avenues subsidiary So Hum Bharat, to apply for the new umbrella entity (NUE) license from the Reserve Bank of India (RBI). Facebook and Google will hold smaller stakes in the consortium.

The Tata Group’s planned NUE is reported to be seeing participation for financial services and tech giants such as Mastercard, Flipkart, PayU and National Bank for Agriculture and Rural Development (NABARD), who are expected to together buy a 30% stake in Ferbine, the Tata subsidiary that will build the NUE as per the proposal.

Previous month, the RBI extended the deadline for receiving applications for an NUE license to March 31, 2021. The earlier deadline was February 26. In its notification, RBI wrote that it had received requests from various stakeholders, including the Indian Banks Association, for extending the timeline, keeping in view the Covid-19 related interruptions.