Editor's Take | RBI allows e-wallet interoperability

Donna Miller
October 18, 2018

Interoperability across mobile wallets shall be enabled through unified payments interface (UPI), says RBI.

The Reserve Bank on Tuesday released operational guidelines to facilitate payments among prepaid instruments (PPI) such as mobile wallets, a move aimed at promoting money transfer between e-wallets and digital transactions.

"This will enable players to start issuing payment instruments from card networks (RuPay/Visa/MC) which will be accepted across both physical merchant locations through PoS Teeminal or through Bharat QR code and there is no need for us to onboard merchants separately".

Another interesting fact: Interoperability has also been allowed for niche segments such as "meal, gift and mass transport system".

The inter-operability would be achieved in three phase i.e. inter-operability of PPIs issued in the form of wallets through UPI, between wallets and bank accounts through UPI, and interoperability for PPIs issued in the form of cards through card networks.

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"All PPI issuers intending to implement interoperability through UPI and / or card networks shall adhere to the instructions contained in these guidelines". "PPI holders shall be on-boarded for UPI by their own PPI issuer only". PPI issuers, RBI said, shall act as payment system providers (PSP) in the UPI. "PPI issuers shall only link their customer wallets to the handle issued to them and PPI issuers as PSP shall not on-board customers of any bank or any other PPI issuer", it said. While there was a delay from the central bank in issuing guidelines, wallet founders, grappling with multiple regulatory and technical challenges, can now heave a sigh of relief.

The Reserve Bank of India (RBI) issued consolidated guidelines for enabling all phases "in order to prepare better for implementation of interoperability".

UPI is a payments system launched by the National Payments Corporation of India in August 2016.

In layman terms, this means now users can transfer money between wallets, from wallets to cards, and from cards to wallets seamlessly. KYC is a process through which financial institutions verify information about customers. However, interoperability will only be made available for full KYC wallets. In the online segment, mobile wallets can directly issue payment addresses using the UPI network.

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