Why Facebook, Google and Amazon want to build online payments platforms for India

Some of the largest companies in the world are teaming up with local conglomerates to get a share of India’s fast-growing online payments ecosystem.

Four consortiums have submitted applications for the National Umbrella Entity licenses, which will allow firms to build a real-time payment platform for India. These consortiums include companies such as Silicon Valley giants Facebook and Google, and India’s largest businesses like Reliance Industries, Tata Group, HDFC Bank and ICICI Bank.

The Reserve Bank of India had invited applications for National Umbrella Entity licenses in August 2020. The new platforms will work as alternatives to the country’s only instant digital retail payment network, the United Payments Interface.

UPI and Big Tech

Building a payment platform for Indians has caught the attention of these giants mainly because of the success that UPI has tasted since its inception in April 2016.

UPI, which is owned by a group of Indian banks, is a payment mode that can be used for most online transactions in India ranging from paying for groceries to applying for shares in an IPO. Its convenience has led to the value of transactions done via UPI go from Rs 6,950 crore in the financial year 2017 to Rs 41 lakh-crore in the financial year 2021.

This growth has been fueled by factors…

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