Policy Bazaar joins Paytm-Ola-IndusInd Bank consortium for NUE
Insurance Platform Policy Bazaar has partnered with Paytm-Ola-IndusInd Bank consortium for NUE (New Umbrella Entity). The companies have already set up an entity called Foster Payment Network.
Three Paytm group entities and Mumbai based Electronic Payment and Services (EPS) are likely to co-promote Foster Network. They will own controlling stakes and control over 50% of the NUE. Paytm Financial bank, Paytm Payments bank and Paytm founder Vijay Shekhar Sharma may pick up around 10% stake each and EPS could also pick up a matching stake. Ola Financial, PolicyBazaar and IndusInd bank are expected to own less than 10% stake each in the NUE. The remaining players in the consortium are Non-bank lender Centrum finance, Suryoday small finance bank and data analytic platform Think360.ai and Fintech Zeta.
Digital payments are increasing because almost everyone is carrying a smartphone and online payment is quite easy. Recently Paytm recorded 1.2 billion transaction across platform in February, 2021. But even with the massive transactional volume, these applications have not been able to generate revenue.
Up until now, all these platforms had to rely on National Payment Corporation of India’s (NPCI) Unified Payment Interface (UPI). It powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments. Slowly it became a monopoly and other platforms like Paytm received less revenues because the NPCI is registered u/s 8 of the Companies Act, 2013 which is Non-Profit Company. New NUE one can get themselves registered as Non-profit as well as regular company (for profit).
Other Big Players in the NUE Framework
Other big players like Reliance, Amazon and TATA Group have already submitted their proposals for setting up an NUE. The draft on New Umbrella Entities (NUE) Framework was released by RBI on 18th August, 2020 and last date of submitting applications was 26th February, 2021, but after multiple requests from various stakeholders this deadline has been extended to 31st March, 2021. Applications will be scrutinized by an External Advisory Committee (EAC) and it will submit its recommendations to the Reserve Bank. The Board of Regulation and Supervision of Payment and Settlement Systems (BPSS) will be the final authority on issuing authorization.
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