Paytm, Ola, IndusInd may bring UPI alternative: Report

Unified Payment Interface (UPI) developed by the National Payments Corporation of India powers all the cash-less transactions in the Indian market. Private digital wallets such as Google Pay, Phone Pe Paytm use them to offer contactless payment solutions.

Now, it has come to light that popular FinTech companies such as Paytm, Ola Financial, IndusInd Bank, and others are planning to apply for New Umbrella Entity (NUE) to set up their own alternative payment solution to UPI in India, The Economic Times reported

Besides the aforementioned trio, Zeta Pay, Electronic Payment Services (EPS), and Centrum Finance are part of the NUE group and are expected to submit the proposal to the Reserve Bank of India (RBI) later today (February 26).

RBI had released guidelines for for-profit NUE in 2020. It was meant to encourage the development of new technology to enhance digital transactions with less risk of misuse by bad actors.

Digital transactions are steadily increasing in India since the demonisation in 2016 and the Covid-19 outbreak-induced safety protocol in early 2021 further boosted the usage.

As per the latest report released by NPCI, India witnessed 2.3 billion transactions worth Rs 4.31 lakh crore in January 2021. PhonePe topped the list with 968.72 million transactions worth 1.91 lakh crore and followed by Google Pay with 853.53 million transactions worth 1.71 lakh crore. Paytm, Amazon Pay, and WhatsApp are other major UPI-based digital payment solution providers.

Previously, Amazon was reported to be in talks with ICICI, Axis Bank, Visa, Bill Desk, and Pine Labs to form the first NUE group, but it hasn't materialised so far.

There is another team of companies Infibeam Avenue, Tata Group, and Yes Bank, eyeing to form an NUE group.

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