Mumbai: Digital wallets have been brought almost on a par with bank accounts in terms of interoperability and ‘know your customer’ (KYC) regulations. The Reserve Bank of India (RBI) has allowed KYC-compliant wallet accounts to send money to other wallets and bank accounts using the Unified Payment Interface — an account-to-account remittance platform.
The flip side is that nonKYC wallets can now no longer be used for peer-to-peer transfers. The RBI has barred issuers of prepaid instruments (PPIs) from creating new accounts each time to facilitate cash-based remittances to other PPIs/bank accounts. For subsequent remittances, issuers will have to use the same account each time. The move comes on the back of complaints that fraudsters are using wallets to siphon off funds from stolen debit and credit cards.
Paytm founder Vijay Shekhar Sharma said, “The wallet that we built in 2014 has now become a full-blown financial services system. It is a welcome step that the wallet is being treated practically on a par with bank account.” He added that Paytm will open its merchant network for all payment providers. “We are going to do what Elon Musk does. He offers Tesla batteries to all. We are not a champion of one company one business,” said Sharma.
The digital wallet compa-
Digital wallet cos will need to make major investments in getting customers to be KYC-compliant Paytm to spend $500m by 2020 on KYC
Fund transfers between bank accounts & e-wallets through the UPI platform to be allowed ny, which is now Paytm Payments Bank, has budgeted $500-million investments up to 2020 to complete KYC requirements on 50 crore account holders. According to Sharma, the new guidelines will ensure that only serious players are in the game.
Under the new norms, the RBI has said that KYC-compliant wallets can load up to Rs 1 lakh in cash. The move has been welcomed by all wallet providers. However, cash loading has been capped at Rs 50,000 per month. “As an in- dustry, we would like to seek clarity with the regulator and understand better reasons for a few downward revisions and limits, like the limit of Rs 10,000 on minimum KYC accounts,” said Bhavik Vasa, chief growth officer, ItzCash Ebix.
According to Naveen Su-
Non-KYC wallets cannot be used for remittances. Cash loading limits halved to 10,000
Ban on Non-KYC remittance triggered by fraudsters using e-wallets to siphon off funds from stolen cards rya, chairman, Payments Council of India, the new norms would ensure that PPIs contribution to digital payments from current share of less than 10% can move to 30-40% in next 5 years.
The norms have implication for widening the acceptance of digital payments in the country. Going forward, merchants acquired by the digital wallet companies can accept electronic payments from all players including banks thanks to the Unified Payment Interface.
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