Reliance Industries Ltd., led by Mukesh Ambani, plans to seek a license to enter India’s burgeoning digital payments business partnering with Google and Facebook, people with knowledge of the matter said, according to a report by Bloomberg.
Reliance Industries, India’s largest company by market value is teaming up with its investors, American tech giants, Facebook and Google, as well as Indian multinational financial technology company, Infibeam Avenues Ltd., to apply for a license from the Reserve Bank of India. The consortium is developing a detailed plan currently, according to the people who asked not to be identified as the discussions are private.
A Reliance spokesman declined to comment on the matter at hand, while a representative for Infibeam also declined to comment “citing confidentiality agreements.” Emails to representatives at Google and Facebook were also not answered immediately. The development, first reported by the Economic Times, said that a consortium led by the Tata Group and another by Amazon were among other applicants.
Reliance’s interest in setting up an electronic payment platform underscores Asia’s richest man, Mukesh Ambani’s vision of pivoting the conglomerate toward consumer businesses of telecom, retail, and e-commerce — a plan which received $27 billion in support from global investors last year.
According to a report by Yahoo Finance, “Last year, India’s central bank invited companies to forge new umbrella entities (NUEs) to create a payments network that would rival the system operated by the National Payments Council of India (NPCI), as it seeks to reduce concentration risks in the space.”
A not-for-profit company set up in 2008, NPCI, counted dozens of banks as its shareholders as of March 2019, including the State Bank of India, Citibank, and HSBC. Billions of dollars in payments are processed daily by the NPCI via services that include inter-bank fund transfers, ATM transactions, and digital payments.
The Indian digital payments market is estimated to touch $1 trillion by 2023, according to Credit Suisse Group AG. Ambani’s venture, if granted a license, will compete against the NPCI for a slice of the market, which was boosted amid the pandemic and lockdowns last year that forced people to stay at home.