RBI makes mobile wallets and prepaid cards interoperability mandatory by March 31, 2022

The Reserve Bank of India (RBI) has said that prepaid payment instruments like Paytm, MobiKwik and PhonePe have to offer their know-your-customer or KYC compliant users interoperability mandatorily by March 31, 2022.

What this essentially means is that a user who has a full KYC compliant payment wallet will be able to send and receive money to and from different mobile wallets. 

The wallet based prepaid payment instruments or PPIs will have to enable interoperability through UPI while card-based prepaid payment instruments will have to enable it through card networks, the central bank said in a circular. 

This means that payment wallets and prepaid cards could be used to withdraw cash at ATMs, micro-ATMs and eligible Point of Sale terminals by March next year. 

Users of full KYC-compliant PPIs issued by non-bank PPI issuers can withdraw a maximum of Rs 2,000 per transaction and Rs 10,000 per month per PPI, the circular said. 

“Any PPI issuer offering this facility [interoperability] shall put in place proper customer redressal mechanisms. Complaints in this regard shall fall under the ambit of the respective ombudsman schemes and instructions on limiting liability of customers,” the RBI said in its circular. 

We have reached out to Paytm and PhonePe for comment and will update the story when they respond. 

The idea to introduce interoperability within PPIs was first floated by the RBI in 2017 and it had laid down guidelines for enabling it in 2018, although at the time it was not made mandatory. 

However, in its statement on developmental and regulatory policies issued in April 2021, the RBI said that despite a passage of two years, migration towards full-KYC PPIs, and interoperability has not been significant. This is why it was decided to make interoperability mandatory for full-KYC PPIs and for all acceptance infrastructure. 

According to the RBI’s latest circular, prepaid payment instruments for mass transit systems are exempt from interoperability and gift prepaid payment instruments have the option to offer interoperability.