News Today – Amazon, Facebook compete for India’s digital payments business

by Guwahati_City

News Today | Today Breaking News – By Guwahatyassam.info

MUMBAI — U.S. and Indian companies are seeking to participate in a planned expansion of the payments system business in India, which is home to the world’s largest online payments market. The Reserve Bank of India, the nation’s central bank, plans to build a new payment system, with six consortia, whose members include Amazon and Facebook, aiming to win an operating license.

In February 2020, the Reserve Bank of India announced a plan to invite applications for a license to set up a New Umbrella Entity (NUE), under which multiple companies would create and operate retail payment systems across the country. The central bank set the end of March 2021 as the deadline for applications and the submission of concrete business plans. Those awarded licenses will be entrusted with a wide range of responsibilities, including “settlement methods, standards, and technology development.”

Although there has not since been a formal announcement from the central bank, six consortia have so far expressed interest. Local group Reliance, whose business is centered around petroleum but which is also expanding in retail, is linking up with search group Google and social media company Facebook. WhatsApp, the messaging and voice-over-IP service owned by Facebook, is used by some 400 million people in India and also provides payment services.

ICICI Bank and Axis Bank, which will partner with tech group Amazon, are the second- and third-largest private-sector banks in India. An official at Axis Bank told local media that their consortium would be a union of long-established banks with several decades of experience and an agile fintech service, claiming that their consortium would have an advantage due to its customer access and its already operating a large payment network.

Major U.S. information technology companies have been unable to operate as they might wish in China’s business environment due to censorship and other problems, but they willingly invest in India where growth is expected in the digital field. Facebook and Google, for example, have already worked with Reliance, their NUE license partner, and both have equity stakes in a Reliance-affiliated telecom company.

Domestic companies are also aiming to expand their payment businesses by acquiring an NUE license. Payment and ecommerce unicorn Paytm, a private startup with a valuation of over $1 billion and a pioneer in payment services in India, will tie up with major ride-hailing company Ola and other partners. Vijay Shekhar Sharma, CEO of Paytm, said that their consortium had representatives for all types of payment services.

In India, National Payments Corp. of India (NPCI), in which more than 60 financial businesses have stakes, operates the Unified Payments Interface, an interbank online payment system.

Online payments, which grew after the abolition of high-value bank notes in the country in 2016, have rapidly increased, with noncontact transactions becoming ever more popular during the coronavirus pandemic. The number of real-time payments transactions in India recorded 25.5 billion in 2020, marking the world’s highest rate, far ahead of China’s 15.7 billion transactions, according to major U.S. payment service ACI Worldwide.

However, with the rapid rise in the number of such payments, the increased pressure on existing systems has emerged as a new problem. The Indian central bank pointed out in 2019 that the situation, in which payment systems were run by just a few businesses, had raised a range of issues, including concerns about “concentration, the need for competition and the resultant impact on economic efficiency and financial stability.”

It has been noted that the concentrated burden on the NPCI’s UPI system has resulted in an increase in failed payments recently.

NPCI has restricted efforts to generate profit due to its policy of serving the public interest, while the new NUE will be allowed to operate on a for-profit basis. Transactions through UPI amounted to about 40 trillion rupees ($532 billion) in fiscal 2020. Professional services group PwC predicts that the value will grow more than threefold to 128 trillion rupees by fiscal 2024. Licensed companies are expected to obtain large fees, which will promote competition.

The central bank is expected to select operators over about a half year, but there is concern that it might exclude foreign companies. India prohibited the use of Chinese payment app Alipay in 2020 amid a serious confrontation with China over a disputed border area.


India blocked 43 more Chinese mobile apps, including Alipay last November, a move that reflected security and political considerations.

  © Reuters

When the UPI-based WhatsApp payment service was officially approved in November 2020, the NPCI set the maximum number of users at 20 million, with the proviso that it be “raised in phases.” The NPCI did not comment on the reason for the limit. The NPCI also announced what amounts to a 30% ceiling on UPI transactions for foreign companies.

The government will have to strike a delicate balance between fostering local industries and ensuring security. 





This News Present You By Guwahatiassam.info With Out any changes as it Publish at the Original Source.

Like Us to Read This Type of News

  • Related Articles

    سایت شرط بندی معتبر ایرانی

    سایت های پیش بینی ایرانی

    شرط کده

    shartwin

    pinbahis

    yekbet

    بهترین سایت های پیش بینی

    شرط برو

    جسوس بت

    سایت های پوکر آنلاین

    ایران بت

    انجمن پیش بینی ایران

    romabet

    pinbahis

    maltcasino

    asyabahis

    sekabet

    maltbahis

    1xbet

    pinbahis

    superbahis

    betboo

    pulibet

    betting sites of tanzania

    parimatch

    betboro

    1xbet

    melbet

    takbet

    مل بت