Google, Facebook, Amazon to setup rival NPCI

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Google, Facebook, Amazon to setup rival NPCI:

The plan for setting up institutions similar to the National Payments Corporation of India (NPCI) are still only on paper. The Reserve Bank of India (RBI) has merely issued guidelines for setting up of a pan-India new umbrella entities (NUE) for retail payment systems.

Yet, works were afoot by big players like the Reliance Group and Tatas to set up their own payments network. A couple of banks like the SBI and HDFC had also reportedly shown interest in such a network.

Now, global tech giants like Google, Facebook and Amazon - which of course have a huge stake in India’s digital payments ecosystem, are also keen to have tie ups with Indian firms to create a rival to NPCI.

These big names are keen to have their own version of NPCI so as to get a bigger play in the digital payments market in India.

Govt not keen on another NPCI-like body

The new entity will be a company incorporated in India under the Companies Act, 2013, with a minimum paid-up capital of Rs 500 crore.

As it happens, the Indian government is not enamoured of this plan and has conveyed its concerns to the RBI.

The government feels that payment system should be a core function (like issuing voters ID or Aadhaar) handled by the government and the private sector should be kept at arm’s length.

RBI, for its part, wants to avoid concentration of payments risk and the entire system being controlled by one entity. It also feels that competition would help in innovation and efficiency.

Aside from government’s reluctance, some stakeholders have expressed concerns over indirect foreign ownership of proposed payments umbrella firms.

RBI has specified that all entities eligible to apply as promoter should be owned and controlled by resident Indian citizens, thus limiting the extent of foreign holding.

But fears are still rife that the payment systems could go under indirect control of foreign owners, since a large number of Indian fintech companies have foreign ownership.

But this cap on foreign holding is what is impelling tech giants to look for Indian partners.

Google, Facebook in talks with Jio -

As per a report in Economic Times, Google and Facebook are said to be in talks Reliance Jio to explore the possibility of setting up an NPCI-like body.

Amazon is said to be exploring a few other options. One market gossip is that it might pick some one like the Tatas who are also keen to enter the fray.

Among other companies, Reliance Industries and Paytm are said to be interested in securing licences and running an entity that will compete with NPCI. Banks like the SBI and HDFC are also said to be keen for this venture, it is learnt.

The fact that having one’s own payments network system will give one a lot of autonomy is at the core of Google, Facebook and Amazon’s desire to get into the ecosystem.

Also, the recently announced 30% cap by NPCI is affecting players like Google that operates Google Pay.

Amazon, of course, has Amazon Pay, and Facebook recently got permission to run WhatsApp Pay.

NPCI has capped the proportion of transactions that a single company can process to 30%. The reason being stated is to “address the risks and protect the UPI ecosystem as it further scales up.”

17 Comments  |  
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What do they get? Say I pay someone using Amazon UPI with SBI, does SBI pay Amazon commission?

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From wherever you copy paste please add the link of source.

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caks2006407 wrote:

What do they get? Say I pay someone using Amazon UPI with SBI, does SBI pay Amazon commission?

No, UPI payment system developed by NPCI.

Amazon’s Domestic Indian partner company (might be TATA Group) will launch any UPI like alternative payment system.

Suppose TATA group create a new UPI like payment system, Name – “XYZ

now you can link your SBI bank in GooglePay, Phonepe or Paytm and pay anywhere using Amazon-TATA’s “XYZ” payment system.

when you pay using GooglePay, Phonepe or Paytm. you will get 2 options.

1) UPI
2) XYZ

Select any one option and pay.

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Nomad wrote:

From wherever you copy paste please add the link of source.

Search on Google laughing

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looks like citibank like foreign companies are eyeing indian MONEY MARKETS

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pentiumd wrote:

looks like citibank like foreign companies are eyeing indian MONEY MARKETS

Citi bank already a shareholder of NPCI.

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pentiumd wrote:

what if they become owner of one such NPCI

not possible.

1) RBI is unlikely to issue more than two licenses.

2) Promotor/promotor group entities “owned and controlled" by Indian residents.

3) No single promoter / promoter group shall have more than 40% investment in the capital of the New Umbrella Entity (NUE). (The promoter/promoter group shareholding shall be diluted to a minimum of 25% after 5 years of the commencement of business of the NUE).

4) If the applicant entity has any Foreign Direct Investment (FDI) / Foreign Portfolio Investment (FPI) / Foreign Institutional Investment (FII), it should fulfil the capital requirements according to the FDI policy.

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abhishek012 wrote:
No.

how come? Just like how any bank should get an approval from RBI, they should get the approval from NPCI for any new payment mode!

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abhishek012 wrote:

No, UPI payment system developed by NPCI.

Amazon’s Domestic Indian partner company (might be TATA Group) will launch any UPI like alternative payment system.

Suppose TATA group create a new UPI like payment system, Name – “XYZ

now you can link your SBI bank in GooglePay, Phonepe or Paytm and pay anywhere using Amazon-TATA’s “XYZ” payment system.

when you pay using GooglePay, Phonepe or Paytm. you will get 2 options.

1) UPI
2) XYZ

Select any one option and pay.

And create more mess and confusion. One is upi is enough. This should be governed by a single body only.

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abhishek012 wrote:

No, UPI payment system developed by NPCI.

Amazon’s Domestic Indian partner company (might be TATA Group) will launch any UPI like alternative payment system.

Suppose TATA group create a new UPI like payment system, Name – “XYZ

now you can link your SBI bank in GooglePay, Phonepe or Paytm and pay anywhere using Amazon-TATA’s “XYZ” payment system.

when you pay using GooglePay, Phonepe or Paytm. you will get 2 options.

1) UPI
2) XYZ

Select any one option and pay.

Bro it still doesn’t answer this
What do they get? Say I pay someone using Amazon UPI with SBI, does SBI pay Amazon commission?
You are our wiki for these kinda things.

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billubakra wrote:

Bro it still doesn’t answer this
What do they get? Say I pay someone using Amazon UPI with SBI, does SBI pay Amazon commission?
You are our wiki for these kinda things.

currently Zero MDR on UPI.

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billubakra wrote:

Bro it still doesn’t answer this
What do they get? Say I pay someone using Amazon UPI with SBI, does SBI pay Amazon commission?
You are our wiki for these kinda things.

even if they charge 1 rupee fees per transaction.. thats huge amount of fees.. they will earn in hundreds of crores per day.

Missing