The key attraction for most is also apparently that it is to be incorporated as a company in India under the Companies Act, 2013 and likely to be allowed as a ‘for-profit’ entity.
Some of the biggest names in the global tech space – the likes of Facebook, Google and Amazon – to consortiums formed by domestic companies like Cholamandalam Investment and Finance Company (Chola), which is the financial services arm of over Rs 38,000-crore Murugappa Group, will be awaiting the outcome around September when the Reserve Bank of India (RBI) is likely to announce the players who may get the new umbrella entity (NUE) licence for retail payments.
It is still not clear how many licences will finally be given out to set-up, what the central bank describes as “pan-India umbrella entity/entities focussing on retail payment systems.” The key attraction for most is also apparently that it is to be incorporated as a company in India under the Companies Act, 2013 and likely to be allowed as a ‘for-profit’ entity.
But then, what can possibly attract the global big tech? Financial Express Online asked Kishore Biyani, who has seen the space evolve and played an important role in the Indian retail story. Without wanting to comment on individual entities, he feels in an era where global companies have to compete with China, then it does boil down to a game of footprint and if China comes armed with its numbers then India is the only country that can offer a match in terms of customer touchpoints. So, if for instance, global tech giants from say the US are to get beyond their domestic 300 million customer base then, some of them, who are already invested in India like Facebook, Google and Amazon, may find it only logical way ahead at a time when India has opened up the opportunity.
“The new age economy is all about owning a customer and the ultimate aim of all the big tech companies is also to own the customer,” says Kishore Biyani. Nitin Chugh, managing director and CEO of Ujjivan Small Finance Bank, says Ujjivan is a member of one of the consortium — Vishwakarma Payments — that has applied for the licence along with the five or six such applications for the new umbrella entity (NUE) licence for retail payments. He says, “we are along with Cholamandalam, FSS, Zoho, Zerodha, RazorPay and Airpay.
He feels the major implication of this initiative is that “it will offer more options to users.” The underlying argument for most seems that UPI – the payment mode that is used in most online transactions – is already tried and tested and anything similar by another payment consortium is expected to only give greater choice to consumers.
While there is no clarity as yet on how many licences are likely to be issued by the RBI, the expectation is that by September it will be clear.