The Reserve Bank of India (RBI) has mandated that prepaid payment instruments (PPI) or mobile wallets like Paytm, PhonePe, MobiKwik will have to be interoperable starting from April 2022. This means that a mobile wallet user, who is fully compliant with know-your-customer (KYC) norms, will be able to send and receive money from different wallets.
This will be achieved through the Unified Payments Interface (UPI) for e-wallets and via card network interoperability for card-based PPIs, the central bank said in a circular issued on Wednesday. “It shall be mandatory for PPI issuers to give the holders of full-KYC PPIs (KYC-compliant PPIs) interoperability through authorised card networks (for PPIs in the form of cards) and UPI (for PPIs in the form of electronic wallets),” the RBI said.
RBI also added in its circular that PPIs for Mass Transit Systems (PPI-MTS) will remain exempted from interoperability while Gift PPI issuers have the option to offer interoperability. But interoperability has to be enabled by March 31, 2022.
Moreover, mobile wallets can now be used for cash withdrawals up to Rs 2,000 per transaction with an overall limit of Rs 10,000 per month per PPI. The wallet limit has also been increased from Rs 1 lakh to Rs 2 lakh.
“Any PPI issuer offering this facility shall put in place proper customer redressal mechanisms. Complaints in this regard shall fall under the ambit of the respective ombudsman schemes and instructions on limiting liability of customers,” the circular noted.
“PPI issuers shall put in place suitable cooling periods for cash withdrawal upon opening the PPIs or loading/re-loading of funds into PPIs to mitigate the risk of fraudulent use of PPIs,” it added. A cooling off period is a short amount of time during which transactions are barred. For example, when you add a bank beneficiary - you are not allowed to transfer money immediately.
The proposal of making PPIs interoperable was first mooted by the RBI in 2017 and it had given guidelines for enabling it in 2018, but had not made it mandatory then. In its statement on development and regulatory policies issued in April 2021, the RBI, however, said that despite the passing of two years, migration towards full-KYC PPIs and interoperability has not been significant and so proposed to make interoperability mandatory for full-KYC PPIs.