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SoftBank-backed insurance platform Policybazaar will partner with Paytm and Ola Financial, as well as private sector lender IndusInd Bank and a handful of consortium players to set up a New Umbrella Entity (NUE) to build a national payments infrastructure company. These companies have set up an entity called Foster Payment Network which will front the NUE bid under the Reserve Bank of India’s framework.
Paytm Payments Bank, Paytm Financial Services, and Paytm founder Vijay Shekhar Sharma are expected to pick up around 10% stake each in the NUE. EPS, a retail banking infrastructure provider headquartered in Mumbai with global operations in Australia and the Philippines, could pick up a matching stake. Ola Financial and Policybazaar, along with IndusInd Bank, may each take less than 10% non-controlling stake in the NUE. Non-bank lender Centrum Finance, Suryoday Small Finance Bank, data analytic platform Think360.ai, and fintech Zeta are the remaining consortium players which will have partial stakes in the NUE.
“The NUE will follow a three-tier ownership structure,” a source said. “The notion of diversified owners adds value in the kind of product the NUE can develop as well.” For instance, a company like Centrum is a specialist in foreign exchange, whereas Policybazaar is a leading insurance distributor. “Different parts of the payment puzzle can be solved through these diverse engagements,” the source added.
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RBI released its NUE framework in August last year for Indian and foreign firms to set up for-profit NUEs to “de-risk” India’s burgeoning payments ecosystem which in recent weeks has been subject to increased downtimes and mass-outages due to system vulnerabilities. These NUEs can also set up payment systems to rival Unified Payments Interface, run by the National Payments Corporation of India, and roll out new products in digital payments. NPCI is a not-for-profit undertaking, controlled largely by banks and regulated by RBI.
