RBI has said that it will tweak its guidelines in order to facilitate Inter-Operability in Prepaid Payment Instruments (PPIs). The step will help mobile wallet companies like Paytm, Mobikwik, Oxigen, Jio Money etc. to grow up and will also push digital transactions thus facilitating people.
Brief Summary of RBI’s Statement
The Reserve Bank of India has said that it will issue a revised instruction on October 11, 2017 in order to allow inter-operability between two mobile wallets. This means that one person can send and accept money to and from any other payment mobile wallet. For example, after the implementation, a PayTM user can send money to an Oxygen wallet user which is presently not possible. The reason is to boost e-payments and reduce paper money transaction. This will also help the mobile wallet companies in their business. In its statement on Development and Regulatory Policies, the RBI said that it will take 6 months to fully implement the instructions which will be issued on October 11.
The PPIs are the substitute for paper currency and includes mobile wallets, prepaid cash coupons, and prepaid telephone top ups. In March 2017, the RBI has asked for feedback regarding the grievance of customers and PPI operators in order to find out solutions. Now after examining the feedback, RBI has acted to solve the grievances of the customers as well as the operators.
A Step to Promote Digital Transaction and Providing a Competing Platform for Mobile wallet Businesses
Almost all the e-wallet companies have welcomed the decision of the RBI. Kiran Vasireddy, COO of PayTM welcomed the RBI’s move. He said that this step will allow the users of all wallets to send their money to PayTM to access the largest set of use-cases and merchant points that PayTM has built. He also said that it will boost digital payment ecosystem. Bipin Preet Singh, CEO of MobiKwik said that it will provide homogenous environment for the growth of mobile wallets. Industry experts are claiming that PPI segment can see fivefold growth in 6 months for wallet companies.
“The PPI isn’t complicated and will take only a month for the bigger better companies to do it. This will help the user base growth five times,” said the Chairman of Payment Council of India.
There are more than 250 million PayTM users while there are 260 million MobiKwik users in collaboration with BSNL and Bajaj Finserve. While Oxygen wallet has 20 million users and Freecharge has 25 million users. One can also send money directly to bank accounts by linking it with their bank details. Many e-wallets like PayTM charge tax for transferring money from one account to another. It will be interesting to watch what changes are seen in the digital transactions after this move.