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Lost count of the amount of cash-backs you have earned in different mobile wallets, facing issues over lack of space on your smartphone, or having problem transferring money to someone who doesn’t have the same wallet as yours? Come April next, these issues will be a thing of the past.
The Reserve Bank of India, in a notification on Wednesday, said that it will soon release guidelines for prepaid instruments (PPIs) that allow all KYC-compliant wallets such as Paytm, Mobikwik, Oxigen, FreeCharge and Citrus, among others, to be able to transact with each other from April 2018. The RBI will be issuing master directions by October 11, 2017.
Hailing this as a welcome step, wallet players said interoperability or inter-wallet transactions will not only benefit consumers but also expand the adoption of wallets in the country, which witnessed huge growth since demonetisation last year.
However, with the launch of UPI and UPI-enabled apps such as Bhim, PhonePe and Google Tez, consumers are slowly losing interest in wallets.
According to Payment Council of India Chairman Naveen Surya, UPI-enabled apps are already accounting for 30-40 per cent of all UPI transactions at present.
BusinessLine spoke to industry experts and wallet players who were of the view that with interoperability guidelines in place, the wallets will get a new lease of life.
“The interoperability between wallets is not the only gamechanger. We would be happy if offline and online merchants are enabled by banks to take payments from any wallets. With this, a customer would not need to carry physical cards anymore and can pay through his phone.
“This is the most critical one and would help in faster adoption of wallets.” Surya said, adding that with interoperability in place consumers would not need to have multiple wallets or maintain balances in those wallets.
The Mobile Wallet founder and CEO, Vinay Kalantri, said that with interoperability in place, the wallet players would have to work on ways to differentiate themselves from others and not use cash-backs and discounts as the only pull-factors.
The Mumbai-based wallet player will soon be launching an NFC-led tap-and-pay feature, where users can pay by tapping the digital wallet on the POS machines. He also said that the wallets will act as ‘checking accounts’ for the users who can store and transact from their wallets without having to expose their bank accounts to the merchants directly.
The RBI is drafting these guidelines to encourage competition, improve security and bring in more innovation in the wallet ecosystem.
Bhavik Vasa, Chief Growth Officer, ItzCash, said, “Interoperability is beyond just wallet to wallet transfer, it also means wallet to bank, wallet to merchant and vice-versa. It is a larger piece in an entire digital payments eco-system which enables and empowers all the players, be it banks, network and non-banks to facilitate seamless operations across instruments.
“Today, we already have success stories of interoperability in the current environment — for example, IMPS by NPCI.”
According to Bipin Preet Singh, Founder and CEO of MobiKwik, “This helps us widen our reach and brings enormous value to our business. Collaboration and competition are going to drive the digital payments industry into its next phase.”
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