(Image source from: The News Minute)
The Reserve Bank of India has relaxed interoperability norms for digital wallet companies in India making it possible for digital wallets to not only transfer funds from one wallet account to another but also make two-way transfers, according to a report in Economic Times.
This means that users can now transfer funds between wallets and as well from their wallets to bank accounts. For instance, a Paytm user can send money to a MobiKwik user.
All these have been made executable with one rider that the wallets must have amply complied with the KYC (Know Your Customer) norms already spelled out by RBI. What's more, these digital wallets will get the opportunity issue prepaid cards to their customers as well.
RBI has cleared the air on all these issues relating to the digital or e-wallet operations in its elaborated guidelines.
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The interoperability will be implemented with the Unified Payment Interface (UPI). The identical way, the cards, if issued will be brought within the existing card networks which have a beefy arrangement in accepting cards issued by different entities through the POS machines regardless of who supplies these machines.
Some of the existing rules governing the issuance of and transactions through all card instruments, particularly with respect to the security necessitates will apply to these PPIs too, issued by the e-wallet companies. This will likewise mean these companies may not have to reinvent the wheel by going through onboarding of merchant establishments either.
The cards issued will follow the EMV chip design from the word go dissimilar to the existing card issuers who are still in the process of replacing the old magnetic strip cards. Thus, for all practical purposes, it is a win-win situation for them.
One significant development out of these fresh RBI guidelines is that some of these digital wallets can short-circuit the banks and offer direct deals to their customers.
-Sowmya Sangam
