And finally, a new digital world begins in India.
Reserve Bank of India has issued guidelines, which makes interoperability of payments instruments possible.
In layman terms, this means now users can transfer money between wallets, from wallets to cards, and from cards to wallets seamlessly.
However, there is one condition: The money transfer between wallets has to be made via UPI.
RBI Guidelines for Interoperability Of Wallets
The Watal Committee had issued the deadline of February 9th, 2017 for issuing guidelines related with interoperability of wallets and other prepaid payment instruments or PPIs.
Now, after almost 1.8 years, the guidelines have been finally issued.
The guidelines for the interoperability has been issued in three layers:
- Interoperability of wallets, using UPI
- Interoperability between wallets and card companies, using UPI
- Interoperability between different cards, using the card network.
UPI Must For Money Exchange Between Wallets
One very interesting decision regarding interoperability between wallets, and between wallets and cards is that, UPI is compulsory.
This way, RBI has made sure that UPI is used more, and more.
Hence, say you have some money in Paytm, and want to transfer to a friend who is using Mobikwik. You will need to use UPI for transferring money.
Similarly, if you have a Visa debit card, and want to receive money from a friend who has Paytm wallet, then again, UPI will have to be used.
However, in case you have Visa debit card, and your friend who has Mastercard wants to transfer money, then UPI is not needed: The existing card network needs to be used here.
Interoperability Is Not Compulsory!
In their guidelines, RBI has made it clear that this new interoperability feature is not mandatory for PPI issuers. Hence, wallets and cards which wants to participate in the interoperability feature are welcomed to take part.
However, if seen objectively, then which wallet or card provider will want to isolate themselves, and not offer interoperability for their users.
Another interesting fact: Interoperability has also been allowed for niche segments such as ‘meal, gift and mass transport system’.
Another condition: Only KYC enabled PPIs will be able to participate in the interoperability operations.
You can find the RBI guidelines on Interoperability right here.
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