Google, Facebook, Amazon to setup rival NPCI

148°
Finance Ninja
abhishek012

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  |  
9 Dimers
  • Sort By
Deal Lieutenant Deal Lieutenant
Link Copied
plus1
Benevolent Benevolent
Link Copied

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

Finance Ninja Finance Ninja
Link Copied

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.

View 4 more replies
Deal Captain Deal Captain
Link Copied

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

Finance Ninja Finance Ninja
Link Copied

Search on Google laughing

View 1 more reply
Deal Cadet Deal Cadet
Link Copied

looks like citibank like foreign companies are eyeing indian MONEY MARKETS

Finance Ninja Finance Ninja
Link Copied

Citi bank already a shareholder of NPCI.

View 2 more replies
Deal Cadet Deal Cadet
Link Copied

But still, they would need approval from NPCI.

Finance Ninja Finance Ninja
Link Copied
No.
View 1 more reply
replyuser
Click here to reply
Reply