The RBI makes interoperability mandatory for all wallet and PPI issuers
The Reserve Bank of India (RBI) announced on Wednesday its decision to make interoperability mandatory for all full KYC prepaid payment instruments (PPI) and other payment infrastructures. The regulator also announced an increase in the allowable outstanding balance in PPI from Rs 1 lakh to Rs 2 lakh and allowed cash withdrawals from full KYC non-bank wallets. The regulations effectively bring wallets to the level of bank accounts in terms of service offerings.
RBI Governor Shaktikanta Das expressed his displeasure with the lack of efforts by industry actors to volunteer for interoperability. In October 2018, the central bank issued guidelines for the voluntary adoption of interoperability for PPIs with full KYC. Since the migration towards interoperability was not significant, it will now be mandatory for full KYC PPIs and for the entire payment acceptance infrastructure.
Currently, cash withdrawals are only allowed for full KYC PPIs issued by banks. Allowing cash withdrawals from all PPIs in conjunction with the mandate for interoperability will encourage migration to full KYC PPIs and also complement the acceptance infrastructure in Tier III to VI centers, the RBI said. In addition, the centralized payment systems (CPS) operated by RBI – RTGS and NEFT – will be opened to operators of non-bank payment systems such as PPI issuers, card networks, white label ATM operators and TReDS (Trade Receivables Discounting System) platforms. The measure aims to minimize the settlement risk.
When asked about data breaches in non-bank PPIs and their role as the supervisory architecture of RBI, Managing Director T Rabi Sankar replied that the aim of the regulatory authority was always to protect customers and make transactions as secure as possible. “In this respect, as we recently issued to banks, we are examining guidelines that could set the basic minimum standards for cybersecurity and other security issues. In relation to such issues, we become caught up in these matters and take all necessary measures to reduce the possibility of such occurrences, ”he said.
Manoj Chopra, VP & Head – Products and Innovation, InfrasoftTech, said interoperability could help wallets reclaim the space they had lost on banks and other players with the advent of Unified Payments Interface (UPI) and new KYC requirements. to win back. “The cashbacks offered didn’t help much either. Interoperability will provide the much-needed boost for wallets and PPI providers, ”Chopra said, adding that the transition would be risky. Customers need to be more cautious about digital fraud, and wallet providers need to upgrade their technology infrastructure to cope with these risks.
Because wallets are built with most of the transactional features available on bank accounts, they can effectively compete for micro-savings from the sub-banking segments, said Ketan Doshi, MD, PayPoint India.
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