NEW DELHI: Starting April 2022, a mobile wallet user, who has fulfilled all know-your-customer (KYC) norms, will be able to send and receive money from different mobile wallets including the likes of Paytm and PhonePe.
In a recent circular, the Reserve Bank of India (RBI) has made mobile wallet interoperability mandatory from FY23 (aligned with the framework outlined in its policy statement last month), which experts say would put the non-bank (prepaid payment instruments) PPI issuers or the digital wallets at par with traditional bank accounts in terms of services offered. The move, they say, will enable wider usage and penetration of digital payments.
Shilpa Mankar Ahluwalia, Partner - FinTech, Shardul Amarchand Mangaldas & Co said that the new RBI norms will create a much greater level playing field between bank and non-bank PPI issuers. Additionally, mobile wallets can now be used for cash withdrawals up to Rs 2,000. The wallet limit can be increased to Rs 2 lakh from Rs l lakh, the circular said.
“These quasi bank payment features will enable much wider usage and penetration of PPIs pushing the growth of digital payments in the country,” Mankar added. Interoperability, in simple terms, means that customers who have completed full-KYC will be able to transfer funds to beneficiaries of other PPIs or banks. So from wallet service provider like Paytm you can transfer money to PhonePay and vice-versa.
While the move would open up another window for wallet companies to explore new business opportunities, experts say it remains to be seen how wallet operators can build on this and how this might eventually impact the idea of payments banks. The cost of entry into a new industry, however, is likely to get lowered. Meanwhile, the only difference between the two will be that payments banks will pay interest on deposits, while wallet balances will not yield any return, said an industry expert, requesting anonymity.