Amazon, ICICI Bank, Axis Bank & Others To Present Joint NUE Proposal To RBI

Ecommerce giant Amazon, along with ICICI Bank, Axis Bank and Visa, will reportedly present a proposal to the Reserve Bank of India (RBI) for setting up a New Umbrella Entity (NUE).  

Last year, RBI announced that private entities, subject to certain requirements, would be eligible to apply for an NUE license. An NUE has been envisaged as an entity with functions similar to the Indian government-owned National Payments Corporation of India (NPCI) which owns and operates the UPI interface as well as the RuPay network, along with the wider retail and payments settlement system in the country. Unlike NPCI, an NUE could be a for-profit entity. 

According to ET, which first reported the development, the Amazon-ICICI-Axis consortium also features Indian merchant payments unicorn Pine Labs and Indian online payment gateway Billdesk. The RBI had listed February 26, 2021, as the last date for receiving proposals for the NUE license. 

Previous reports had suggested that big tech giants such as Google, Facebook and Amazon may try and tap into the NUE opportunity by partnering with Indian companies. 

Late last year, Indian business behemoths such as the State Bank of India (SBI), Reliance Jio and Tata Group were also said to be considering applying for an NUE license. But the finance ministry is understood to have flagged SBI’s plan of partnering with HDFC Bank and Bank of Baroda for setting up an NUE. The ministry feels that a state-owned bank’s involvement in an NUE could limit the success potential of state-owned NPCI’s many projects for financial inclusion, not to mention kick up a ‘conflict of interest’ conundrum.

Fintech veteran Naveen Surya, the chairman emeritus of Payments Council of India has also set up So Hum Bharat Digital to apply for an NUE licence. His company will be backed by Infibeam Avenues, a digital payments and ecommerce technology platform.

NUEs will be allowed 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 remittance services. They can also develop new payment methods, standards and technologies and monitor related issues within the country and internationally. NUEs can also support and promote developmental objectives like awareness building about payment systems.

In November last year, Shishir Mankad, financial services head at Praxis Global Alliance, a management consulting firm, talked to Inc42 about the possible innovations that NUEs could bring to the retail payments space. “Let us say I want to use my debit card to generate a QR code. Today, both are different payment methods. But I believe such innovation is possible where I can generate a QR code from my debit card and send it to my wife who is at a grocery store. Now that my wife has the QR code on her phone, the store can scan it to pull the money from my account. NUEs will possibly look at further interoperability between different methods of retail payments,” he had said. 

A detailed overview of NUEs and what to expect from them can be read in an earlier Inc42 story titled, “With Big Businesses Expected To Apply, Will NUE Make NPCI Redundant?”