Umbrella entity for retail payments

The RBI has released a framework for setting up of a new umbrella entity for retail payments in the country including net and Aadhar-based payments and remittances as well as ATMs and point of sale payment services.

Currently, only the National Payments Corporation of India (NPCI), a not-for-profit company, performs this role.
Officials said the RBI’s move is a bid to reduce the risk of having just one player handling such a vast area of finance. Besides, the RBI is worried that this could lead to monopolistic behaviour.
The entity will have to have a minimum paid-up capital of Rs 500 crore and no single promoter group will be allowed to have more than 40 per cent stake in the new payments entity. Any investor with 25 per cent or more investment will be considered as a promoter.
Applicants must also have at least three years of experience in the payments ecosystem.
The formation of the umbrella entity has been authorised under the Payment and Settlement Systems Act, 2007.

NPCI was incorporated in 2008 as an umbrella organization for operating retail payments and settlement systems in India.
It is an initiative of the RBI and Indian Banks’ Association (IBA) under the provisions of the Payment and Settlement Systems Act, 2007, for creating a robust Payment & Settlement Infrastructure in India.
It has been incorporated as a “Not for Profit” Company under the Companies Act 2013.
It has changed the way payments are made in India through a bouquet of retail payment products such as RuPay card, Immediate Payment Service (IMPS), Unified Payments Interface (UPI), Bharat Interface for Money (BHIM), BHIM Aadhaar, National Electronic Toll Collection (NETC Fastag) and Bharat BillPay.

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