The Reserve Bank of India on Tuesday issued final guidelines to enable interoperability for pre-paid instruments or mobile wallets. Among other things, the rules will allow mobile wallets to issue cards in partnership with card networks like Mastercard, Visa.
PPI issuers shall adhere to all the requirements of card networks/UPI, including membership type and criteria, merchant on-boarding, adherence to various standards, rules and regulations applicable to the specific payment system such as technical requirements, certifications and audit requirements, governance, etc.RBI Guidelines.
Contrary to expectations, the RBI didn’t impose any minimum net worth requirement on mobile wallets before permitting them to become interoperable.
According to Bipin Preet Singh, founder and chief executive officer of Mobikwik, the guidelines will give a boost to mobile wallets. He explained that mobile wallet firms can now issue cards directly by collaborating with card networks like Mastercard, Visa and Rupay. Until now, this could only be done through a tie-up with a bank. In the online segment, mobile wallets can directly issue payment addresses using the UPI network.
This will benefit mobile wallet firms, specially those who have invested in building a network, said Singh.
Interoperability also levels the playing field between mobile wallets and payments banks, in terms of payments. As such the advantage of payments banks narrows to their ability to take small deposits and providing cash out facilities.
In August, PPI transaction stood at 372.94 million in volume and Rs 189.81 billion in value.
This is a very progressive move for non-bank players, said Navin Surya, chairman emeritus of the Payments Council of India in an emailed statement. This will allow mobile wallets to take their payment services to the unbanked and put them in the league of debit and credit cards. “Also now UPI would be accessible to large masses even those who are not banked or are under-banked,” added Surya.
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