New Delhi: The Reserve Bank of India (RBI) will allow interoperability among ‘know your customer’-compliant prepaid payment instruments (PPI), including mobile wallets, within six months of issuing revised rules, in an attempt to make electronic payments seamless.
The new rules are expected by 11 October.
“Inter-operability among KYC-compliant PPIs shall be implemented within six months of the date of issuance of the revised master directions, which will be issued within a week, i.e., by October 11, 2017," RBI said in a statement on Wednesday.
KYC is a process through which banks and other financial institutions obtain and verify information about customers’ identity and address to ensure services are not misused. RBI had issued guidelines for issuance and operations of PPIs in April 2009 to foster an orderly development of the pre-paid ecosystem.
In light of the experience gained, a draft of master directions on the subject was placed in the public domain for comments on 20 March.
“The feedback has been examined and it has been decided to rationalize the operational guidelines with a view to encouraging competition and innovation, and strengthening safety and security of operations, besides improving customer grievance redressal mechanisms," RBI said.
Currently, a person who has a Paytm wallet, for example, can’t make a payment from his wallet to one run by a rival company. That will change after the new rules are introduced.
“This will be a major game changer primarily for the merchants with physical outlets who have to go through the process of sign-ups for different wallets that they accept payments from," said Sunil Kulkarni, joint managing director at Oxigen Services (India) Pvt Ltd, an e-wallet and payment solutions company.
“Once interoperability is introduced, if a merchant has signed up for say a Oxigen wallet through full KYC, then he need not sign up for other wallets but he can continue to receive payments from any wallet."
Interoperability might pave way for unified payments interface (UPI) getting introduced for wallets, too, said Kulkarni. For the user, this means that they do not have to download another wallet if they already have MobiKwik. They can pay across the merchant network of any other PPI.
“This helps us widen our reach and brings enormous value to our business," said Bipin Preet Singh, founder and CEO of MobiKwik, a digital payments firm.