The Reserve Bank of India (RBI) on Wednesday announced its selection to make interoperability mandatory for all complete-KYC prepaid payment instruments (PPIs) and other payment infrastructure. The regulator simultaneously announced an improve in the permitted outstanding balance in PPIs to Rs 2 lakh from Rs 1 lakh and permitted money withdrawals from complete-KYC non-bank wallets. The regulations proficiently bring wallets at par with bank accounts in terms of service offerings.
RBI governor Shaktikanta Das expressed displeasure with the lack of work on the portion of market players to voluntarily move towards interoperability. The central bank had issued recommendations in October 2018 for adoption of interoperability on a voluntary basis for complete-KYC PPIs. As the migration towards interoperability has not been important, Das mentioned, it will now be mandatory for complete-KYC PPIs and for all payment acceptance infrastructure.
At present, money withdrawal is permitted only for complete-KYC PPIs issued by banks. The permitting of money withdrawals from all PPIs, in conjunction with the mandate for interoperability, will enhance migration to complete-KYC PPIs and would also complement the acceptance infrastructure in Tier-III to -VI centres, the RBI mentioned. In addition, the RBI-operated centralised payment systems (CPSs) – RTGS and NEFT — will be opened up to non-bank payment program operators like PPI issuers, card networks, white label ATM operators and trade receivables discounting program (TReDS) platforms. The measure is aimed at minimising settlement threat.
Responding to a query about information breaches at non-bank PPIs and the part of the RBI’s supervisory architecture thereof, executive director T Rabi Sankar mentioned the regulator’s objective would generally be to guard the consumer and make transactions as protected as probable. “To that extent, like we have issued to banks recently, we are looking at issuing guidelines that could lay down the basic minimum norms for cybersecurity and other security issues. As far as instances of such issues are concerned, we are seized of those matters and we are taking all the steps required to reduce the possibility of such events,” he mentioned.
Manoj Chopra, VP & head – merchandise and innovation, InfrasoftTech, mentioned interoperability may possibly enable wallets claw back the space they had lost to banks and other players with the rise of Unified Payments Interface (UPI) and the new KYC needs. “Cashbacks offered also did not help much. Interoperability will provide that much needed push for wallets and PPI providers,” Chopra mentioned, adding that the transition would be fraught with dangers. Customers will have to be more cautious about digital frauds and wallet providers will have to beef up their technologies infrastructure to be in a position to handle these dangers.
As wallets grow to be enabled with most transaction attributes readily available on bank accounts, they will be in a position to proficiently compete for micro-savings from the below-banked segments, mentioned Ketan Doshi, MD, PayPoint India.