The Reserve Bank of India on Wednesday said digital wallets would be interoperable through the Unified Payments Interface (UPI) within six months. Though the central bank laid a road map for increased usage of digital wallets, it was silent on a timeline for full interoperability among prepaid instruments. The RBI, in its master direction, said it would enable full interoperability in phases and issue operational guidelines separately. In the first phase, all know-your-customer (KYC)-compliant wallets would be made interoperable through the UPI. Interoperability would be enabled between e-wallets and bank accounts through the UPI and among digital wallets through cards in subsequent phases. However, the central bank did not clarify when these phases would be rolled out. The RBI said all entities other than banks would need to have a minimum net worth of Rs 5 crore in the latest audited balance sheet at the time of application for e-wallet operation.
By the end of the third financial year of receiving the approval, the wallet operator would need to have a minimum net worth of Rs 15 crore, which should be maintained at all times. The earlier minimum net worth requirement was Rs 2 crore at the time of application.The draft circular had mentioned a minimum net worth of Rs 25 crore, which has been reduced in the master direction. It also directed issuers of prepaid payment instruments (PPI) to “ensure adherence to the technical and operational requirements for such interoperability, including those relating to safety and security, risk mitigation.” In case of semi-closed PPIs, with minimum KYC details, the RBI reduced the amount that can be held in an account to Rs 10,000 from Rs 20,000. E-wallets with full KYC details can hold up to Rs 1 lakh. Navin Surya, Chairman, Payments Council of India, said this was the third edition of reforms laying the foundation for PPI to become interoperable with all existing payment instruments and become as accepted as debit or credit cards. “This would ensure that PPIs’ contribution to digital payments from the current share of less than 10 per cent can move to 30-40 per cent in the next five years.” The first phase of reforms allowed non-banking entities to participate in regulated payment systems and the second phase allowed domestic remittance from PPIs to bank accounts. All existing PPI holders who don’t share relevant KYC would be converted to the minimum KYC slab by January 2018, and would not get further credit. The RBI also made it easy for PPIs to take over another non-banking PPI. Such an acquisition or merger would not require the central bank’s permission. The acquirer would have to only submit a letter to the RBI within 15 days of acquisition. Industry executives said the new rules would help increase the use of e-wallets but some more clarity was necessary. “We would like to seek clarity on the reasons for a few downward revisions and limits, like minimum KYC PPI limit of Rs 10,000 and also on gift cards, which are non-cash out instruments. These may limit our fight against physical cash in the economy, especially when we can buy gold up to Rs 2 lakh with cash in our country,” said Bhavik Vasa, chief growth officer, ItzCash Ebix.