India’s move to diversify its digital payment system presents a massive opportunity for technology giants such as Amazon, Facebook and Google, who are keen to tap the country's rapidly expanding market.
The Reserve Bank of India (RBI), the country’s central bank, invited companies last year to apply to establish alternatives to the retail digital payment network run by the government-operated National Payments Corporation of India (NPCI).
The move is expected to reduce the country's dependence on one network and mitigate risks. It can also help companies looking to gain a foothold in India’s burgeoning digital payments industry, analysts say.
“It's a welcome move, as it opens up the possibility of additional standards that could potentially deepen digital payments penetration,” says Utkarsh Sinha, the managing director of Bexley Advisors, an investment advisory firm based in Mumbai.
Digital has become an all-pervasive mega-trend, dramatically changing the lives of individuals, business models of enterprises, and the economy of India
India's digital payments market has been expanding rapidly in recent years and is projected to more than triple to 7,092 trillion rupees ($97.5tn) by 2025 from the 2020 financial year, according to RedSeer Consulting. It attributes this trend to the country's young population and rapidly rising smartphone ownership. Government policies have a role to play too, as Prime Minister Narendra Modi pushes for a digital economy.
The Covid-19 pandemic has helped accelerate digital payments in India, particularly after Asia’s third-largest economy was placed into lockdown last year to stem the spread of the pandemic, according to a PwC report.
"Digital has become an all-pervasive mega-trend, dramatically changing the lives of individuals, business models of enterprises, and the economy of India," says Nitin Seth, the author of Winning in the Digital Age.
Currently, digital payments are processed by the NPCI that was established in 2008 by the RBI as a not for profit company to operate the retail payments and settlement systems in the country. It is backed by dozens of retail banks.
The NPCI runs the Unified Payments Interface (UPI), launched five years ago. Users link their mobile phone numbers to their bank accounts through this system and they can easily transact online on retail platforms such as Amazon and through apps such as Paytm to pay online.
In total, 31.7tn rupees of transactions were processed on NPCI's payments interface between April 2020 and January 2021, and it handled about half of India's 41 billion online retail transactions, according to data from Bloomberg. Currently, there is no alternative to the UPI system, but that is set to change with the government’s move.
As digital payment volumes boom, authorities and businesses are concerned that dependence on one system could make it more challenging to manage risks such as cyber fraud. That prompted the RBI to open up the market to other firms to set up for-profit retail payment systems, under what it refers to as “new umbrella entities”.
“There should be more than one faster payments platform in a large country like India,” says Ajay Adiseshann, the founder and chief executive of PayMate, an Indian payments solutions firm. “NPCI has had a monopoly with UPI and that is not healthy.”
“A sole institution like NPCI can be a systematic risk to the payment system of the country,” says Suresh Rajagopalan, the chief executive of Wibmo, a digital payments company based in the US and Bangalore, India.
Mr Adiseshann says new payment systems could also help “foster innovation beyond certain types of payments”, which can be achieved by allowing companies to operate commercially in this space, as the RBI is planning to do.
Under the central bank's rules, foreign companies can only own up to 25 per cent of a new umbrella entity.
At least six groups have been formed to try for the licences, according to Bloomberg. These include a consortium of companies including Amazon, Visa, and Indian banks ICICI and Axis. Mastercard is also planning to apply for a licence along with Indian conglomerate Tata, according to Bloomberg.
India's richest man Mukesh Ambani's Reliance Industries has teamed up with Facebook and Google – which last year both invested billions of dollars into Reliance's digital services company Jio Platforms. Meanwhile, home grown electronic payments giant Paytm and ride-hailing app Ola are understood to have joined forces to apply for a licence.
Google Pay, Amazon Pay, and Facebook-owned WhatsApp Payments are all available in India, but they all currently depend on the UPI system for their transactions to be processed.
Google and Amazon did not respond to requests for comment. A Facebook spokesperson said the company would not comment on the matter.
Competition will be stiff as the RBI is only expected to award one or two licences. The deadline to apply is the end of this month and industry insiders say the initiative has the potential to transform the sector.
Mr Rajagopalan says the new umbrella entities could bring many deep-pocketed players who can “accelerate the Digital India mission in tier two and three centres [smaller towns and cities] where digital payments are burgeoning post-Covid”.
A sole institution like NPCI can be a systematic risk to the payment system of the country
The RBI, when it first invited companies last year, said that the scope of activities of an umbrella entity – alongside operating new payment systems in the retail space in India - would include “identifying and managing relevant risks such as settlement, credit, liquidity and operational and preserve the integrity of the system” and “monitoring retail payment system developments and related issues in the country and internationally to avoid shocks, frauds and contagions that may adversely affect the system or the economy in general”.
The new licensees would also be expected to work on areas such as enhancing awareness about the payment systems, the RBI said.
With the creation of new entities, “payment industry players can leverage their existing payment platforms and infrastructure to set up new payment methods, partner with payment aggregators, and expand their footprint among competitors”, according to the PwC report.
But analysts point out that implementation will be a challenge and it remains to be seen how things pan out for those that win a licence.
“One must celebrate with caution,” Mr Sinha says. “The existing standards are working well and UPI is perhaps one of the best systems available globally. We have seen in the past how companies rush to adopt newer RBI licences, but little adoption happens on ground causing the licences to languish.”
However, there could be significant rewards for those companies that do action this effectively once they win a licence.
“What gives this particular licence more teeth” is the fact that it also allows the new licensees to set up and operate ATMs, point-of-sale systems and remittance services, alongside a digital payments interface, Mr Sinha says.
While companies will be able to make money from transaction fees, it is the data from electronic transactions that “represents the real value”, he adds.
Customers could also stand to benefit from having more choice and the platforms may offer incentives to vendors as they compete to grab their share of the market. But they will have to wait a while for the new systems to get up and running.
The RBI said that it is aiming to complete the processing of the applications it receives within six months.
The central bank is likely to assess “the pedigree of the entities, track record of management, usual financial metrics, and in this case payments experience and track record” before awarding the licences, Mr Adiseshann says. That would mean stalwarts such as Amazon, Google or Facebook indeed stand a chance to tap into India’s digital payment sector.
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
New schools in Dubai
APPLE IPAD MINI (A17 PRO)
Display: 21cm Liquid Retina Display, 2266 x 1488, 326ppi, 500 nits
Chip: Apple A17 Pro, 6-core CPU, 5-core GPU, 16-core Neural Engine
Storage: 128/256/512GB
Main camera: 12MP wide, f/1.8, digital zoom up to 5x, Smart HDR 4
Front camera: 12MP ultra-wide, f/2.4, Smart HDR 4, full-HD @ 25/30/60fps
Biometrics: Touch ID, Face ID
Colours: Blue, purple, space grey, starlight
In the box: iPad mini, USB-C cable, 20W USB-C power adapter
Price: From Dh2,099
Founder: Ayman Badawi
Date started: Test product September 2016, paid launch January 2017
Based: Dubai, UAE
Sector: Software
Size: Seven employees
Funding: $170,000 in angel investment
Funders: friends
Emergency phone numbers in the UAE
Estijaba – 8001717 – number to call to request coronavirus testing
Ministry of Health and Prevention – 80011111
Dubai Health Authority – 800342 – The number to book a free video or voice consultation with a doctor or connect to a local health centre
Emirates airline – 600555555
Etihad Airways – 600555666
Ambulance – 998
Knowledge and Human Development Authority – 8005432 ext. 4 for Covid-19 queries
THE SPECS
Engine: 1.5-litre turbocharged four-cylinder
Transmission: Constant Variable (CVT)
Power: 141bhp
Torque: 250Nm
Price: Dh64,500
On sale: Now
Citizenship-by-investment programmes
United Kingdom
The UK offers three programmes for residency. The UK Overseas Business Representative Visa lets you open an overseas branch office of your existing company in the country at no extra investment. For the UK Tier 1 Innovator Visa, you are required to invest £50,000 (Dh238,000) into a business. You can also get a UK Tier 1 Investor Visa if you invest £2 million, £5m or £10m (the higher the investment, the sooner you obtain your permanent residency).
All UK residency visas get approved in 90 to 120 days and are valid for 3 years. After 3 years, the applicant can apply for extension of another 2 years. Once they have lived in the UK for a minimum of 6 months every year, they are eligible to apply for permanent residency (called Indefinite Leave to Remain). After one year of ILR, the applicant can apply for UK passport.
The Caribbean
Depending on the country, the investment amount starts from $100,000 (Dh367,250) and can go up to $400,000 in real estate. From the date of purchase, it will take between four to five months to receive a passport.
Portugal
The investment amount ranges from €350,000 to €500,000 (Dh1.5m to Dh2.16m) in real estate. From the date of purchase, it will take a maximum of six months to receive a Golden Visa. Applicants can apply for permanent residency after five years and Portuguese citizenship after six years.
“Among European countries with residency programmes, Portugal has been the most popular because it offers the most cost-effective programme to eventually acquire citizenship of the European Union without ever residing in Portugal,” states Veronica Cotdemiey of Citizenship Invest.
Greece
The real estate investment threshold to acquire residency for Greece is €250,000, making it the cheapest real estate residency visa scheme in Europe. You can apply for residency in four months and citizenship after seven years.
Spain
The real estate investment threshold to acquire residency for Spain is €500,000. You can apply for permanent residency after five years and citizenship after 10 years. It is not necessary to live in Spain to retain and renew the residency visa permit.
Cyprus
Cyprus offers the quickest route to citizenship of a European country in only six months. An investment of €2m in real estate is required, making it the highest priced programme in Europe.
Malta
The Malta citizenship by investment programme is lengthy and investors are required to contribute sums as donations to the Maltese government. The applicant must either contribute at least €650,000 to the National Development & Social Fund. Spouses and children are required to contribute €25,000; unmarried children between 18 and 25 and dependent parents must contribute €50,000 each.
The second step is to make an investment in property of at least €350,000 or enter a property rental contract for at least €16,000 per annum for five years. The third step is to invest at least €150,000 in bonds or shares approved by the Maltese government to be kept for at least five years.
Candidates must commit to a minimum physical presence in Malta before citizenship is granted. While you get residency in two months, you can apply for citizenship after a year.
Egypt
A one-year residency permit can be bought if you purchase property in Egypt worth $100,000. A three-year residency is available for those who invest $200,000 in property, and five years for those who purchase property worth $400,000.
Source: Citizenship Invest and Aqua Properties
more from Janine di Giovanni
yallacompare profile
Date of launch: 2014
Founder: Jon Richards, founder and chief executive; Samer Chebab, co-founder and chief operating officer, and Jonathan Rawlings, co-founder and chief financial officer
Based: Media City, Dubai
Sector: Financial services
Size: 120 employees
Investors: 2014: $500,000 in a seed round led by Mulverhill Associates; 2015: $3m in Series A funding led by STC Ventures (managed by Iris Capital), Wamda and Dubai Silicon Oasis Authority; 2019: $8m in Series B funding with the same investors as Series A along with Precinct Partners, Saned and Argo Ventures (the VC arm of multinational insurer Argo Group)
Youth YouTuber Programme
The programme will be presented over two weeks and will cover the following topics:
- Learning, scripting, storytelling and basic shots
- Master on-camera presence and advanced script writing
- Beating the algorithm and reaching your core audience
Jeff Buckley: From Hallelujah To The Last Goodbye
By Dave Lory with Jim Irvin
SPECS
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%201.5-litre%204-cylinder%3Cbr%3E%3Cstrong%3EPower%3A%3C%2Fstrong%3E%20101hp%3Cbr%3E%3Cstrong%3ETorque%3A%3C%2Fstrong%3E%20135Nm%3Cbr%3E%3Cstrong%3ETransmission%3C%2Fstrong%3E%3A%20Six-speed%20auto%3Cbr%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh79%2C900%3Cbr%3E%3Cstrong%3EOn%20sale%3A%3C%2Fstrong%3E%20Now%3C%2Fp%3E%0A
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The%20specs
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E2.0-litre%204-cyl%20turbo%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E190hp%20at%205%2C600rpm%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E320Nm%20at%201%2C500-4%2C000rpm%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3E7-speed%20dual-clutch%20auto%3Cbr%3E%3Cstrong%3EFuel%20consumption%3A%20%3C%2Fstrong%3E10.9L%2F100km%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh119%2C900%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ENow%3C%2Fp%3E%0A
Tom Fletcher on 'soft power'
MATCH INFO
Cricket World Cup League Two
Oman, UAE, Namibia
Al Amerat, Muscat
Results
Oman beat UAE by five wickets
UAE beat Namibia by eight runs
Namibia beat Oman by 52 runs
UAE beat Namibia by eight wickets
UAE v Oman - abandoned
Oman v Namibia - abandoned
The specs: 2018 Volkswagen Teramont
Price, base / as tested Dh137,000 / Dh189,950
Engine 3.6-litre V6
Gearbox Eight-speed automatic
Power 280hp @ 6,200rpm
Torque 360Nm @ 2,750rpm
Fuel economy, combined 11.7L / 100km
