While the mobile wallet industry is emerging at an impressive pace in India, it now is looking actively for the Reserve Bank of India to release interoperability guidelines for the industry.
Notably, RBI’s master directions on Mandatory KYC compliance (Issuance and Operation of Pre-paid Payment Instruments) that came in October 2017 had proposed digital wallets to become interoperable within six months. However, the following discussions with stakeholders had postponed the decision. If sources are to be belived RBI is now determined to bring wallet interoperability rules in a month with a delay of two months after the deadline
A report quoting bankers published by ET said,
The National Payments Corporation of India (NPCI) has already cleared the safety security aspects of taking wallets onto the interoperable platform. The RBI is ironing out a few final issues before releasing operational guidelines; this is expected to happen within a month from now.
Interoperability and Mobile Wallet Industry: What is going to change?
Interoperability guidelines facilitate transactions between digital wallets are expected to bring a paradigm shift in the digital payments industry.
- Meanwhile, when Know Your Customer (KYC) has become mandatory for customers to use digital wallets, it is now likely expected for apex bank just waiting to get all the players develop similar technical capabilities.
- Industry experts have said that once guidelines will be out, companies might need another 3 to 6 months to stabilise on new platforms requiring a direct rendezvous to discuss on uniformity and consent with guidelines.
- Interestingly, some companies have already kick-started interoperable systems of UPI by becoming third party service providers for banks. Players such as Paytm, Freecharge, MobiKwik have today joined the UPI bandwagon.
Vivek Belgavi, partner for fintech at PwC said,
I believe India will see a hybrid model for the next three to five years between prepaid instrument players and UPI players and slowly businesses will move from their guarded ecosystems to an interoperable one and that could see digital payment adoption expanding like what we saw in the case of ATMs
According to the latest RBI data, transactions worth $2 Tn (INR 131.95 Tn) were carried out on mobile wallets in January 2018, as compared to $1.9 Tn (INR 125.51 Tn) in December 2017.
Moreover, Boston Consulting Group in partnership with Google has estimated the digital wallet industry of India to reach $500 Bn by 2020, contributing 15% of India’s GDP. Hence, with players like Paytm, PhonePe and Google Tez gearing to push their game, the mobile wallet interoperability guidelines can prove favourable enhancing their position in the country.