The digital payment scenes in India just got a big boost from the Reserve Bank of India (RBI) this week. By 2018, consumers with mobile wallets like Paytm and Mobikwik will be able to transfer money to each other.
With this feature in tow, prepaid wallet players could become an attractive option for consumers, especially if they’re not completely sold on Bharat Interface for Money (BHIM) which is based on the Unified Payment Interface (UPI), set up by the National Payment Corporation of India (NPCI).
Reserve Bank of India (RBI) will allow inter-operability among prepaid payment instruments (PPIs). PPIs, which include the likes of e-wallets, gift cards and meal coupons, are used as substitutes for cash.
According to a statement by RBI, it is expected that wallets like Paytm will be able to inter-operate within six months of the revised directions.
Inter-operability amongst KYC-compliant PPIs (prepaid payments instruments) shall be implemented within six months of the date of issuance of the revised Master Directions, which will be issued by October 11, 2017.RBI Statement
While this might be hard to understand for consumers, but as Bipin Preet Singh, Founder and CEO of MobiKwik explained that the biggest change after this order is that, you won’t need to download multiple wallet apps to transfer money to each other.
And no wonder, all wallet companies are ecstatic with this decision.
Inter-operability was one of the key challenges in increasing the adoption of digital payments in India.Bipin Preet Singh, Founder and CEO of MobiKwik
This decision would act as a strong boost for the digital payments ecosystem in India.Kiran Vasireddy, Chief Operating Officer, Paytm
Having said that, experts believe this decision could go either way for the wallet companies. The need for the Know Your Customer (KYC) process could push consumers away from prepaid wallets, especially with UPI under the helm of multiple banks in the country.
This will put banks on the front foot, and other payment entities like Airtel and Paytm at an advantage. It’ll also be interesting to see if consumers are expected to do their KYC by linking via Aadhaar, which could pose a different set of challenges altogether.
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