The NBFC, which marks the coming together of India’s largest business group and one of the world’s largest financial services groups, will largely deal in loans and credit cards for Reliance Retail customers. The investment is learnt to be in the region of Rs 430-450 crore and Citi is likely to hold a majority stake in the venture.

“The company is eager to get into consumer finance in a big way. If it has announced investments of Rs 25,000 crore in its retail venture, it might as well facilitate easy buying of goods,” said a source close to the development.

Reliance is gearing up for high-street retail with premium and luxury brands as well as the high-value consumer durables segment.It has recently signed up with maker Apple Computer to set up co-branded stores in the country.

Consumer finance, which would include loans and credit cards, is one of the fastest-growing segments in the financial services sector. With annual growth rates of 30-40%, global financial companies including GE (through a JV with Wizard) and Deutsche Bank are entering the segment. While annual credit card spends in India are estimated to be in the range of Rs 50,000 crore, it is difficult to estimate the total size of the consumer finance segment in India. For credit cards, against a global average of 4.6%, India’s penetration is said to be below 1%.

Speaking at the Cannes Lions International Festival of Creativity today, Schmidt said he believes one-third of all restaurants and retail outlets will allow for mobile payments within the next year, the Financial Times reports him as saying. He reportedly told those in attendance that that number should be enough for widespread adoption of mobile payments.

“I judge that based on how long I think it takes, because the terminals are available now, the software is available now or this summer,” the Financial Times reported Schmidt as saying. “How long does it take an infrastructure player to upgrade a significant percentage of their infrastructure–it’s on the order of a year, it’s not a week, it’s not a month but it’s also not five years. It’s an educated guess.”

Schmidt, who stepped down as Google CEO in April, has a vested interest in seeing more establishments allow for mobile payments. Late last month, his company unveiled Google Wallet, a service that uses near-field communication (NFC) to let users pay for purchases with their Android-based devices. Google said it will be partnering initially with Sprint, MasterCard, Citi, and FirstData on the service.

Google Wallet will be available on the Nexus S and will work with “a PayPass-eligible Citi MasterCard and a virtual Google Prepaid card.” The search giant was quick to point out that there are currently more than 124,000 PayPass-enabled merchants in the U.S. and more than 311,000 operating around the world.

Google said last month that all future Android smartphones will be NFC-compatible. Rumors suggest the next iPhone will also feature NFC technology.

But as Schmidt pointed out today, support for NFC in devices is just one piece of the mobile-payment puzzle; payment processors must also double down on the technology. However, Schmidt isn’t worried about that happening for one major reason: “fraud rates are so much lower” with the use of NFC, he said.

“Nobody knows how quickly this will occur,” Schmidt said of credit card companies updating payment terminals with mobile-payment support, “but it’s in their interests to convert as fast as they humanly can.”