India-based multinational conglomerate Tata Group is considering launching a new mass-market payments entity, similar to the non-profit monopoly National Payments Corporation of India (NPCI), which owns hugely successful channels such as unified payments interface (UPI) and IMPS.
The Tata Group is said to have already initiated talks with the Reserve Bank of India (RBI) seeking a New Umbrella Entity (NUE) licence that allows the companies to own and operate a pan-India retail payments network. The legal basis of the licence would be similar to that enjoyed by NPCI.
Tata’s financial services arm Tata Capital and its IT service firm Tata Consultancy Services (TCS) are expected to take the leading role in the proposed venture. However, it is also scouting for potential partners before formalising a concrete business plan for the proposed entity.
According to an ET report citing sources, the launch of the nationwide retail network will be in line with the Tata Group’s plans to take several of its businesses digital and launch a super app to take on Reliance and Amazon.
“They have sought some clarity from the central bank on what the entity would be allowed and not allowed to do. The idea is to have a strong presence in the payments ecosystem where Tata’s rivals are gaining a strong foothold through partnerships or subsidiaries,” a person aware of the development told the publication.
The super app, which is expected to be launched by December this year, will help Tata Group to create a digital services behemoth offering a wide range of products in the retail space. The new app will help consumers avail of a range of services, including food and grocery ordering, fashion and lifestyle, consumer electronics and consumer durables, insurance and financial services, education, healthcare and bill payments.
For this, Tata Group is also said to be in talks to raise $20 Bn-$25 Bn at a valuation of $50 Bn -$60 Bn from US-based retail giant Walmart, which is also a rival of Amazon and Reliance. Besides this, the company may also acquire a 20% stake in online groceries unicorn BigBasket to catch up with other conglomerates.