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RBI TO ALLOW INTEROPERABILITY OF PAYMENTS
- The Reserve Bank of India has released the guidelines for interoperability between prepaid payment instruments (PPIs) such as wallets and cards.
- This will effectively allow users of popular payment wallets such as Paytm, Freecharge, Mobikwik, PhonePe and PayZapp to transfer money from one wallet to another.
- These wallets could implement interoperability through the Unified Payment Interface (UPI).
PPI’S TO ISSUE CARDS
- The RBI has allowed PPIs to issue cards using authorised card networks such as Mastercard, Visa or Rupay.
- PPI issuers shall adhere to all the requirements of card networks/UPI, including membership type and criteria, merchant on-boarding.
- It has mandated for adherence to various standards, rules and regulations applicable to the specific payment system such as technical requirements, certifications and audit requirements, governance, etc.
NOTES
Prepaid Payment instruments are a form of Payment Instruments
BENEFITS OF THE MOVE
- The RBI guidelines while boosting the e-wallet segment, would also ensure the safety and accuracy of the transfer of money by individuals from one wallet to another.
- The transaction from one e-wallet app to another need to be speedy and accurate for the interoperability to be effective and efficient.
- It is a progressive move for non-bank players and would lay the foundation to reach the under-banked and unbanked segment with a powerful payment product.
ANOTHER IMPORTANT POINT
Capgemini’s World Payments Report 2018 Demonetisation has pushed up world digital payments by one percentage point more than expected. Also, India’s high growth rate in e-payments is expected to result in the country overtaking Australia and Canada in electronic payments in the next two years, making it the ninth-largest in the world.
NOTES
- According to Capgemini’s World Payments Report 2018, global non-cash transactions grew 10.1% in 2016 as against the 9.1% forecast in the previous report. “We could not anticipate the Indian government’s demonetisation programme, which resulted in a 33% growth in non-cash transactions,” the report said.
- The biggest contributor to this growth came from debit cards (up 76.2%), and payments by mobile wallets (up 75.5%). Credit card volumes grew 38% in India. The growth of digital payments in India in 2016 was second only to Russia (up 36.5%). China was the thirdhighest at nearly 26%.