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Amidst the booming digital payments market, Indian multinational conglomerate Reliance Industries Ltd. is reportedly joining forces with American tech giants such as Facebook Inc. and Google LLC as well as with financial technology company Infibeam, to seek a license from the RBI (Reserve Bank of India).
The three companies are known to be in talks to craft a meticulous blueprint detailing their entry into the digital payments market, sources claimed. This endeavor might be a result of Reliance Industries securing USD 27 billion last year, from global investors for promoting its interests in telecom, retail, and e-commerce segments.
The RBI has invited applications from companies who wish to enter the digital payments industry by 31st March and is expected to go over their functionalities during the next six months.
If granted a license, Reliance Industries will compete against the National Payments Corporation of India (NPCI) to grab a substantial chunk of the market. It is to be noted that the NPCI is an umbrella organization for operating India’s digital payment and settlements systems.
In August 2020, RBI came up with a framework for NUEs (New Umbrella Entities for retail payments) that would compete with the NPCI, as it aims to reduce concentration risks in the current market.
Reliable sources have also revealed that there were a few other applicants at RBI with Tata Group, one of them was the leading e-commerce giant, Amazon.com, Inc.
Indian digital payments market valuation is expected to reach USD 1 trillion by the year 2023. Market growth is further stimulated by the COVID-19 pandemic, which has forced millions to stay at home and conduct financial transactions online.
The decision to set up a pan India entity for digital and retail payment systems corroborates with Mr. Mukesh Ambani’s vision of extending Reliance Industries’ scope in the retail, e-commerce, and telecom industry.
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