Paytm, Ola eye NUE licence with IndusInd Bank to rival NPCI

Mumbai: Paytm and Ola — two of India’s largest startups — have joined hands with private sector lender IndusInd Bank to apply for a New Umbrella Entity (NUE) licence that will allow them to set up a national payments network with powers similar to incumbent, National Payments Corporation of India.

Vijay Shekhar Sharma-led Paytm is expected to play a leading role in the consortium, in which Ola Financial and IndusInd Bank will have significant stakes, three people aware of the matter told ET.

Non-bank lender Centrum Finance, along with fintech companies Zeta Pay and Electronic Payment and Services (EPS), are also expected to be part of the group that will submit its proposal to the Reserve Bank of India before the deadline expires on February 26, they said.

ET reported previously that Amazon, along with ICICI Bank and Axis Bank, are also in the fray for the licence. Two other consortiums led by the Tata Group and Infibeam Avenues are also learnt to be in the reckoning.

According to a source close to the development, the synergies between consortium partners in the Paytm, Ola, IndusInd partnership will be the key differentiator for the proposed NUE.

“The diversity and technology leadership of consortium partners will be a unique differentiator for this consortium,” the person said. “This set understands consumers better and has successfully delivered national-level complex businesses leveraging technology in the best way. India's digital payments boom requires robust multiple payment products for the next level of growth," the source added.

Paytm, Ola, IndusInd, Centrum Finance, Zeta Pay and EPS did not immediately respond to ET’s queries seeking comment.

“Paytm is a dominant player in the offline payments segment, whereas IndusInd has a strong presence in small Indian towns. Together, they can form a payments network that can be focused on semi-urban and rural acceptance,” said another person.

Paytm is one of India’s leading fintech brands with payments business across categories such as Unified Payments Interface (UPI), wallet, offline and QR code. Through its licensed payments bank, it also runs a payment gateway service for merchants.