RBI issues final guidelines for interoperable digital payment wallets

17 Oct 2018


The Reserve Bank of India (RBI) has issued final guidelines for interoperability among prepaid instruments, including e-wallets, meal vouchers and gift vouchers, in a move that would allow a MobiKwik wallet user to send money to a Paytm user, giving a boost to usage of mobile wallets in the country.

Interoperability is the technical compatibility that enables a payment system to be used in conjunction with other payment systems. Interoperability allows PPI Issuers, system providers and system participants in different systems to clear and settle payment transactions across systems without participating in multiple systems.
For interoperability, PPI issuers should have a board-approved policy and the requirements for interoperability are akin to cards.
Where PPIs are issued in the form of wallets, interoperability across PPIs will be enabled through UPI, while for PPIs issued in the form of cards will be affiliated to the authorised card networks.
While this would facilitate interoperability of prepaid instruments, the central bank has not made interoperability mandatory for service providers. It has also not prescribed any timeline for mobile wallet interoperability.
With interoperable digital wallets, users with different instruments will be able to make seamless transactions. There will also be free flow of money from wallets to banks and vice-versa through UPI.
Banking sources expect the first round of interoperability to emerge in two months. 
As per the road-map laid down by RBI earlier in October, interoperability of all KYC-compliant PPIs was to be enabled in three phases: 
  • Interoperability of PPIs issued in the form of wallets through Unified Payments Interface (UPI);
  • Interoperability between wallets and bank accounts through UPI; and 
  • Interoperability for PPIs issued in the form of cards through card networks.
RBI has directed participating PPI issuers to ensure adherence to the guidelines issued and the instructions on KYC, security for transactions and application life cycle, cyber security, fraud prevention and risk management. in order to prepare better for implementation of interoperability.
The central bank also cited a report on the ‘Working Group on Information Security, Electronic Banking, Technology Risk Management and Cyber Frauds - Implementation of Recommendations’, for wider consultation.
Also, RBI has asked all participating PPI issuers to be guided by the technical specifications / standards / requirements for achieving interoperability through UPI and card networks as per the requirements of the National Payments Corporation of India (NPCI) and the respective card networks. NPCI and card networks shall facilitate participation by PPI issuers in UPI and card networks, it added.

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