RBI is trying to change payments in India, again

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Editor's note: The past five years have seen dramatic shifts in the way money changes hands in India. Earlier this week, the Reserve Bank of India signalled that the end is far from near. On Monday, RBI set the digital payments world abuzz with the announcement of a “Draft Framework for authorisation of a pan-India New Umbrella Entity (NUE) for Retail Payment Systems”. That is a bit of a mouthful, but in a nutshell, the central bank is proposing to let private sector enterprises operate nationwide payments infrastructure. So far, such a role has been restricted mostly to the National Payments Corporation of India, or NPCI. A little context: NPCI runs the Unified Payments Interface system, or UPI, perhaps the Indian financial system’s most popular electronic payment method yet. It allows a person to directly transfer funds from their bank account to someone else’s almost instantaneously, and works across banks and apps such as Google Pay and Walmart-owned PhonePe. NPCI processed about 1.3 billion UPI transactions in each of the previous two months; for comparison, all card payments put together (debit and …