Google, Amazon and Facebook in preparation for big role in digital payment.
US giants Google, Amazon and Facebook are preparing themselves for a big role in India’s fast-growing digital payments market. These three companies can join hands with Indian companies to stand a rival to the National Payments Corporation of India (NPCI).
Three people aware of the case told ET that Google and Facebook have approached Reliance Jio Infocomm Limited for the partnership, while Amazon is currently considering its options. These three companies want at least 12 to 15 per cent stake in the proposed New Umbrella Entity (NUE). As per RBI rules, the promoter of NUE can be any Indian company.
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It is not yet clear whether the three American companies will buy a stake in the same entity or form different partnerships. “India is a lucrative market for Google, Facebook and Amazon and they are seriously looking for a joint venture partner,” said an executive familiar with the ongoing negotiations between different companies in this regard. Jio is his first choice in this. Many domestic companies have approached these companies for JVs. It is too early to say which way these companies will go.
This time Google, Facebook, Amazon and Jio did not respond to emails sent to them. A source said that a stake in NUE would give these companies a chance to present their case to the regulators and banks. They will also be able to present their case in decisions related to digital payments.
What is NUE
Three consortiums led by SBI, Tata and Jio are in the race for NUE. Google and Facebook are eyeing a minority stake in Jio. HDFC Bank, Bank of Baroda, NSE, BSE, NSDL, MasterCard, Visa and Paytm are also competing. A licensed NUE can create a private payment entity like NPCI. It can develop and operate new retail payments networks. It has the possibility of a new UPI, ATM card, POS and cross border system.
