RBI allows private players to manage digital payments, Know more ‘Here’
New Delhi: The Reserve Bank of India (RBI) has released the final framework of a New Umbrella Entity (NUE) for retail payments. Earlier in February, the central bank released a draft of this format. According to the guidelines, any private company with a net worth of 300 crore rupees (Net Worth), who has worked for at least three years in the payment space, can apply for various payment services as an umbrella entity.
Currently, National Payments Council of India (NPCI) which is incorporated as a not-for-profit entity, performs the role of supporting various payment systems together, including RuPay, UPI and National Automated Clearing House, which manages inter-bank transfers.
The RBI move is aimed at developing a network parallel to NPCI, which can maintain interoperability with services such as UPI and yet foster innovation and inclusion in the payments space.
Payments Council of India and Chairman, Fintech Convergence Council Chairman, Navin Surya, ‘With the emergence of additional retail payments umbrella entities post-licensing, it is expected that 500-600 million consumers in India would be using digital payments. It is also expected that 50-55% of all retail payments would be digital. This would place India amongst any other developed economies benchmark across the globe’.
NPCI’s objective of transforming India into a less-cash society, combined with the accelerated uptake of digital payments services due to covid-19, has set the stage for other entities to enter the space as umbrella entities that can operate and provide multiple channels and services.
With the RBI’s green signal to NUEs, customers can expect to see alternatives to tried and tested services such as UPI coming into the market.