Amazon will join forces with ICICI Bank, Axis Bank and Visa besides several others to create a new national payments network.
The aim is to rival the National Payments Corporation of India’s (NPCI) dominance in the retail payments industry in India.
Moreover, this consortium will pave it’s way to a New Umbrella Entity license from the Reserve Bank of India.
The target is towards building a UPI-like settlement system for small and medium enterprises, merchants and consumers.
However, this proposal is set to reach the RBI for seeking it’s approval before February 26.
The objective is to set up an alternative real-time payments system to the NPCI’s Unified Payments Interface (UPI).
Private entities want to create a rival umbrella payments entity after the government removed merchant discount rate on UPI transactions.
This will help in yielding higher profits as compared to the current model under the NPCI.
The discussions picked up speed in the last 2 months with requisite agreements and paperwork on the verge of finalization.
Further, RBI released guidelines for-profit NUEs in August 2020 for the purpose of stimulating competition.
As a result, new consortiums will launch instant payment networks alongside UPI.
Amazon’s UPI service in India processed over 46 million transactions worth Rs 4,044.38 crore in January 2021.
Meanwhile, ICICI Bank managed to process 6.22 million transactions worth Rs 1,835 crore.
Moreover, Axis Bank processed 5.23 million transactions worth Rs 560.7 crore.
Currently, Infibeam Avenue, Tata Group, and Yes Bank, among others, are also in talks for considering an application for NUE.
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