The RBI on Wednesday created an announcement regarding its updated directions for prepaid instruments (PPIs) such as mobile wallets and said that it will pave the way for interoperability between KYC-compliant PPIs, which will be implemented within six months of the issuance of the revised directions – which will be issued on October 11. We’ll know more about how this will operate next week but it appears that you might be able to take money from one wallet, and use it in a different one, six months from today.
In the light of this experience gained, a draft of Master Directions on the subject was placed in the public domain for comments on March 20, 2017. The feedback received has been examined and it has been decided to rationalise the operational guidelines with a view to encouraging competition and innovation and strengthening safety and security of operations, besides improving customer grievance redressal mechanisms. In line with the Vision for Payment and Settlement Systems in the country, the revised framework will pave the way for bringing inter-operability into the use of PPIs. Inter-operability one of KYC compliant PPIs will likely be implemented within six months of the date of issuance of the revised Master Directions, which will be issued within a week, i.e., by October 11, 2017.
This is a fairly significant statement as it takes away one of the big pain points with pockets, for customers – the proliferation of wallets which are necessary for only one task. Right now, you want balance in your Paytm account to pay for Uber rides, and if you would like to take an Ola ride, then you also will need to fill up Ola Money. If you want to have a quicker check-out experience via BookMyShow that is one more wallet, and Amazon provides discounts if you happen to use Amazon Pay.
While there are plenty of services that allow you to utilize multiple pockets – such as BookMyShow itself accepts most of the popular wallets, besides credit and debit cards, internet banking, and so on, even though it has its pocket – there are still enough silos that you wind up having to lock up your money with each different wallet.
With the interoperability of pockets, you might have the ability to fill up any one wallet and either use it directly in place of another one, or at the very least, easily move money between wallets so that it may be used where required.
“We welcome the decision of RBI to bring interoperability amongst KYC complaint wallets,” said Kiran Vasireddy, COO – Paytm. “We believe this will let consumers of all pockets to move their money to Paytm to access the largest pair of use-cases and retailer points which Paytm has built. This should act as a strong increase for digital payments ecosystem in India.”
But, there is one catch – as mentioned above, the RBI has said that this is going to be more limited to KYC compliant PPIs. There are advantages to getting the KYC done, as it raises the maximum limit you’ll be able to store in the pocket, but it’s not clear how many customers of the wallet companies have really taken this step.
Another question is how much of an impact this movement will make today that the Unified Upgrades Interface (UPI) has been introduced and has been growing in popularity. UPI is designed to be interoperable between banks, to the point at which you are able to use any bank’s VPA, with your money in any bank’s account. And a number of companies, including international giants like WhatsApp, Google, Uber, and Truecaller, have all additional (or are adding) support for UPI. In this scenario, it’s hard to gauge exactly how impactful the RBI’s decision will be.