On 09th March 2021, Paytm has announced that it is going to apply for New Umbrella Entities in a consortium with Ola with a motive to provide several other innovative and inclusive digital payments solutions for its users.
As per the PTI, Paytm CEO and Founder Mr Vijay Shekhar Sharma announced that the company is now applying for the NUEs in consortium with OLA. He also added to his statement that “We’ve been saying that payments have become mainstream, and it is important for us to create more payment options and opportunities for consumers and businesses alike. RBI took note of it and has allowed me to apply for NUE. We are going to apply for sure…The process is on.”
If Ola agrees to be a part of a consortium, it will be one of the key partners in the New Umbrella Entity. The consortium includes a small finance bank, a bank, a fintech company, a payments bank, and a tech company.
Features Available with NEUs
It will include ATMs; Aadhaar based payments; White Label PoS; Remittance Services; Standards and Technologies; Newer Payment Methods, Monitoring and handling related issues within the country and internationally; and more. Moreover, these entities will also be liable for clearing and settlement systems and carry on other businesses to strengthen the retail payment system.
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RBI had circulated a framework for authorisation of the Umbrella Entities for retail payments in the country and invited applications from interested entities by 26, February 2021. As per the requests from several stakeholders, the RBI has extended the deadline to apply for New Umbrella Entity to 31st March. Here, NUEs will set up as a company under the Companies Act, 2013 and it will be authorised under the Payment and Settlement Systems Act, 2007. Such bodies are accountable for tasks like managing, setting, and operating new payment systems.
Companies Participating in NUEs
According to a report, several companies have proposed banks and other major tech players to apply for New Umbrella Entities. As per the report, Reliance Industries along with Google and Facebook who have invested in Jio Platforms are in the plan to apply for NUEs, whereas, Tata Group has approached Kotak Mahindra Bank, Bharti Airtel, MasterCard, and HDFC Bank. Amazon has also joined hands with ICICI Bank, Visa, Fin-tech startups PineLabs and BillDesk for NUEs 2021.
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Vijay Shekhar Sharma also said that it can be an opportunity to serve the Indian population with world-class, innovative, and inclusive payment options.
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