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Now You Can Transfer Money Between Digital Wallets: RBI Gives Thumbs Up To New Norms
RBI allows seamless transfer between digital wallets. (Saumya Khandelwal/Hindustan Times via Getty Images
On Tuesday, RBI (Reserve Bank Of India), India’s Banking Regulator, has announced norms for interoperability between pre-paid payment instruments (PPIs) or mobile wallets, enabling the seamless transfer of funds between them. However, the rules are not mandatory for digital wallets to follow. They are just guidelines for those payment platforms that choose to allow interoperability.
The Regulator also said that participating PPIs that issue digital wallets, will have to enable interoperability using the standard Unified Payment Interface (UPI). But, when PPIs are issued in the form of cards, the cards shall belong to the authorized card networks. RBI will also allow interoperability among PPI issuers that operate exclusively in specific segments like meal, gift and mass transport system.
RBI refused to impose any minimum net worth requirements on PPIs to become interoperable. This will provide a level-playing field to all the market players and help boost the Indian fintech startup ecosystem.
Interoperability will provide greater bargaining power to Indian consumers as the PPIs will be forced to differentiate themselves from the competition with better service delivery and greater incentives.
Digital payments in India is an untapped market, and with millions of new bank accounts being opened as part of NDA government schemes like Jan Dhan Yojana, companies are slowly waking up to its potential. Even Platforms like WhatsApp and India Post have applied with the RBI to start digital payments systems. According to the investment banking firm, Credit Suisse, India's digital payment space is expected to grow five-fold to USD 1 trillion by 2023.
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