EXPLAINED: The NUE licence for payments that Tata, Ambani and Bezos have applied for

• The NUE licence would enable the entity to hold pan-India control in payments, rivalling the likes of the government backed National Payments Corporation of India.
• Reliance has reportedly signed up with Google and Facebook to set up a ‘new umbrella entity’ (NUE), which will be promoted by RIL and Infibeam Avenues’ So Hum Bharat.
• Tata Group, Amazon and Paytm too have formed their own consortiums to apply for the licence.

When Mukesh Ambani signed up for a $5.7 billion cheque from Mark Zuckerberg in April, 2020, he made a promise to the Facebook founder to help boost their payments innovations in India. While WhatsApp pay is yet to take off, one year later, it seems Ambani is delivering on that promise through another route which can only be bigger.

Reliance has reportedly signed up with Google and Facebook to set up a ‘new umbrella entity’ (NUE), which will be promoted by RIL and Infibeam Avenues’ So Hum Bharat. Infibeam Avenues’ currently runs the payments gateway CCAvenue.

India’s central bank had floated the bid for NUE licences in August, 2020. The NUE licence would enable the entity to hold pan-India control in payments, rivalling the likes of the government backed National Payments Corporation of India.

NPCI is an initiative backed by the Reserve Bank of India (RBI) and Indian Banks’ Association (IBA) which acts as an umbrella entity that operates retail payments and settlements.

The NUE licence would give the companies the opportunity to set up, manage and operate “ATMs, White Label PoS; Aadhaar based payments and remittance services; develop new payment methods, standards and technologies; monitor related issues in the country and internationally; take care of developmental objectives like enhancement of awareness about the payment systems,” according to the RBI guidelines.

The RBI, which had initially set a deadline of February 26, 2021 for the application of the licences, recently extended it until March 31, 2021. According to reports, RBI is initially going to give out only two NUE licences.

Competition is high

A stake in the control over India’s burgeoning digital payments market, which sees over 93 million transactions worth $12 billion daily, as per a report by HDFC Securities from December, 2020, is an opportunity that Reliance isn’t the only one vying for.


The 152-year old conglomerate Tata Group, which is looking to build its own Super App spread across retail and payments, has reportedly taken over the bid initially expressed by State Bank of India and Bank of Baroda.

The Tatas are bidding through their subsidiary company Ferbine Private Limited, in which HDFC Bank and Kotak Mahindra Bank had already picked up a 9.99% stake each. The deal is also backed by Mastercard, PayU and Reliance’s telecom competitor Bharti Airtel.

In an exchange filing declaring its stake in Tata-owned Ferbine, Kotak Mahindra Bank had said, “The main business of the company would be to operating a pan-India umbrella entity for retail payment systems, as would be allowed/licenced by RBI, subject to the approval of the NUE application.”

Jeff Bezos’ e-commerce firm Amazon, which has been bullish about the Indian payments sector and rolled out its own product Amazon Pay, has partnered with ICICI Bank, Axis Bank and others for the NUE licence.

Meanwhile, India’s digital payments poster boy Vijay Shekhar Sharma too isn’t one to miss out on the opportunity. Paytm too has reportedly partnered with Induslnd Bank, Ola Financial and others to bid for the licence.

The partnerships have sprung up as the RBI mandates that ‘no single promoter/promoter group shall have more than 40% investment in the capital of the NUE’.

The latest developments in the payments sector with the Tata Group, Reliance and Amazon is just the latest in the rivalry between the three companies, who are already competing in the Indian retail sector. The Tata Group is eyeing a 68% stake in Indian grocery e-retail startup BigBasket. The Indian e-grocery sector is heating up with the world’s richest man Jeff Bezos betting on it with Amazon Pantry, India’s richest man Mukesh Ambani upping the game with JioMart.

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