The Reserve Bank of India (RBI) has issued a circular asking all licensed prepaid payment instruments (PPIs) or mobile wallets such as PhonePe, Paytm, Google Pay and Mobikwik, to be interoperable from FY23.
This implies that beginning April 2022, a mobile wallet user, who is fully vetted and has fulfilled all KYC norms, will be able to send and receive money from various mobile wallets.
The central bank added that for card-based PPIs, this can be accomplished through card network interoperability and for e-wallets via the UPI (Unified Payments Interface).
PPI for Mass Transit Systems (PPI-MTS) will remain exempted from interoperability whereas GIFT PPI issuers have the option to offer interoperability, the RBI said in its circular.
Furthermore, mobile wallets can also be used for cash withdrawals up to Rs 2,000, the circular stated, adding that the wallet limit has also been expanded to Rs 2 lakh from Rs 1 lakh.
"Any PPI issuer offering this facility 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 central bank said in its circular.
"PPI issuers shall put in place suitable cooling periods for cash withdrawal upon opening the PPIs or loading/ re-loading of funds into PPIs to mitigate the risk of fraudulent use of PPIs," it noted.
RBI Governor Shaktikanta Das had announced these measures after the April 5-7 MPC (Monetary Policy Committee) meet.
"To incentivise the migration of PPIs to full-KYC, it is proposed to increase the current limit on outstanding balance in such PPIs from Rs 1 lakh to Rs 2 lakh," Das had stated in his post-policy statement.
The RBI had first issued guidelines for the adoption of interoperability on a voluntary basis for full-KYC PPIs in October 2018, however, there was no significant shift towards it.
Presently, cash withdrawal is permitted only for full-KYC PPIs issued by banks, such as debit and credit cards. However, under the new rules, a prepaid card or payment wallet can now be used to withdraw cash at ATMs, micro-ATMs, and eligible PoS (Point of Sale) depots.