Home >News >India >PCI bosses eye NUE licence with So Hum

Chairman Emeritus of Payments Council of India (PCI), Navin Surya and Chairman of PCI, Vishwas Patel have come together to float a new entity So Hum Bharat Digital Ltd.(SoHum), as they look to apply for Reserve Bank of India’s (RBI)-recently approved New Umbrella Entity (NUE).

‘So Hum’ has already onboarded digital payments solution provider, Infibeam Avenues Ltd., as an additional promoter, as the entity is currently in talks to rope in new partners, and raise the minimum paid-up capital requirement of 500 crore for NUE’s.

The central bank in August unveiled the framework for setting up these umbrella entities, which will operate pan-India retail payments systems, as it invited applications from eligible companies by February 26, 2021.

The Reliance Group through Jio, Tata Group as well as a bank consortium led by State Bank of India (SBI) are considered to be top contenders, which will be applying for NUE licences, while partnering with various companies in the fray, according to two executives in the Indian payment ecosystem, who spoke on condition of anonymity.

Even Paytm Payments Bank will be considering applying for the NUE license, according to the three payment executives, aware of the discussions.

‘So Hum’ will look at creating new payment solutions across domains of fintech, BFSI, and digital commerce, and is in talks to partner with these companies, for creating products on specific use-cases, which reduce the dependency on cash transactions.

The first few domains which So Hum might look to disrupt is the country’s microfinance industry where loans are still doled out in cash. Another objective of the newly formed entity is to target close to 500 million users in the next 3-5 years, which have low adoption of current digital payment solutions in the market, as it looks to make transactions almost ‘natural’ and ‘invisible’.

‘So Hum’ will not look to directly compete with existing players to sell its solution, but rather work on principles of interoperability, and work with incumbents to deploy its solutions in the market.

“Presently, there are more than 850 million individuals, constituting almost the entire adult population in the country. The rapid progress in digital payments has necessitated the extension of retail payment systems by RBI to tried and tested organizations which are willing to take up this challenge," said Vishwas Patel, Executive Director of Infibeam Avenues.

“One of the major considerations of this venture has been to deliver the most impactful market expansion in the country through a 6x increase in active digital consumers over the next decade from the current base of 100 million to 600 million," added Patel.

So Hum is the second entrepreneurial stint of Surya, who previously co-founded ItzCash Card Ltd., in 2007, which was one of the country’s first prepaid wallet company, providing digital payment solutions for categories like IRCTC, Utility, Corporate Gift and Travel verticals

In May of 2017, Ebix Inc. acquired 80% stake in ItzCash for 800 crores, giving an exit to Surya and other founders.

“Our government's vision of a 'Digital India' helped in scaling up digital commerce considerably, and this new RBI initiative will go a long way in fulfilling this vision as it seeks to reduce cash transactions even further with a renewed focus on digital payments. It would be exciting to be a part of this expanded system along with Infibeam Avenues and industry stalwarts like Vishwas Patel," said Surya, without disclosing any additional details about the new entity.

Entities which are readying themselves to apply for the NUE license, are expected to submit their applications to RBI, starting January-end. Further, the Central bank is expected to receive close to 8-12 applications for the NUE license, with each entity having at least 4 major investors, according to a payment executive aware about the discussions.

“Possibly every company in the market which has payment or digital commerce operations is interested to either apply or partner with a consortium to apply for this licence. However, entities like Facebook, Amazon and others, which have significant foreign investments would undertake a partnership approach, considering they can’t directly apply for this license due to FDI norms," said the person quoted above.

Jio-led consortium will play on its strength with small and medium enterprises, through Jio Mart and look to add newer customers to the digital payment economy in India.

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