In a bid bring interoperability into the usage of prepaid payment instruments (PPIs), the Reserve Bank of India has put in place a revised framework, which is in line with the Vision for Payment and Settlement Systems in the country. The RBI has not only introduced strict KYC norms to keep digital wallets safe and prevent fake wallet transactions, but has also allowed KYC-compliant digital wallets to send money to other wallets and bank accounts through the UPI platform.
This means that soon you will not only be able to transfer money from your e-wallet, say PayTm wallet, to another wallet, but also to a bank account. However, non-KYC-compliant e-wallets can no longer be used for peer-to-peer transfers.
Welcoming the new norms, Bhavik Vasa, Chief Growth Officer, ItzCash Ebix, said that these guidelines mark the 10-year anniversary to the industry and seem to be a true reflection of a collaborate approach for the industry which will foster the ecosystem and players to focus on their respective core areas of operating and offerings.
However, “as an industry we would like to seek clarity with the regulator and understand better on reasons for a few downward revisions and limits, like minimum KYC PPI limit of 10,000 and also gift cards which are non-cash out instruments and cash loading of PPI limited. These may limit our fight against physical cash in the economy, especially when we can buy gold up to Rs 2 lakh with cash in our country,” he said.
Here are 6 things to know about interoperability between e-wallets and bank accounts:
1. KYC-compliant wallet users can now transfer money between different wallets via UPI.
2. In the second phase, users will be able to transfer funds between wallets and bank accounts through UPI.
3. Interoperability for PPIs issued in the form of cards shall also be enabled in the nest phase.
4. Wallets with full KYC will now have a maximum balance limit of Rs 1,00,000. “While one may use and replenish this balance any number of times in a month, in a given month a user will not be able to load more than Rs 50,000 in cash, through any agent. No such limit exists for loading through bank accounts,” said Ramki Gaddipati, CTO & Co-Founder at Zeta.
5. All PPI transactions will now require additional factor authentication except Mass transit systems.
6. Prepaid meal instruments shall now be issued in electronic form only. No prepaid meal instruments in paper voucher form shall be issued after December 31, 2017.