In a historic decision, Reserve Bank of India (RBI) has ordered all mobile wallets to become interoperable within 6 months. In layman terms, this means that as soon as April 2018, you can transfer funds from your Paytm account to Freecharge wallet; or from MobiKwik to Paytm.
This is a big step to make mobile wallets even more consumer friendly, and more popular; and directly, this is a boost to Digital India vision. In May, we had reported that RBI may come up with concrete rules regarding this feature, which has now been confirmed.
There are two reasons how this will benefit mobile wallets, besides making life easier for existing wallet users.
We will soon discuss that, but before that, let us understand how this happened.
RBI’s Order To Wallets: Become Platform Independent Using UPI
Right now, as I am writing this blog, I have some money left in my Mobikwik wallet, while some digital cash is being parked with Paytm. Yesterday, I received a major cashback on Freecharge as well.
As of now, there is no way I can combine these three different funds into one, and utilize it. All I can do is, login to Paytm, Mobikwik and Freecharge, and use them separately.
This is certainly a big hassle, and RBI has understood the problem.
In their recent notification, they have ordered all mobile wallets to become interoperable or platform independent, and thereby empower users to become more flexible and fluid.
In their notification, RBI said, “In the first phase, PPI issuers (both bank and non-bank entities) shall make all KYC-compliant PPIs issued in the form of wallets interoperable amongst themselves through Unified Payments Interface (UPI) within six months from the date of issue of this direction,”
Hence, UPI is the common platform,which will make all wallets platform independent.
Directly, this can be a major boost for the usage of UPI based transactions as well.
The notification said, “In subsequent phases, interoperability shall be enabled between wallets and bank accounts through UPI. Similarly, interoperability for PPIs issued in the form of cards shall also be enabled in due course,”
Two Major Benefits Due To This Decision
First of all, merchants would be now more open and comfortable in using mobile wallets.
No longer they will avoid its usage, as money can be now transferred from one wallet to another, without any issues. Earlier, the merchants refused to accept any wallet based payment, if they didn’t had that installed.
But now, things would be different.
Second major benefit which we can witness is less merchant acquisition cost for wallets. As funds from any wallet can be transferred to any other wallet, it will trigger fair competition.
Now, dependability of service, and discounts/cashbacks would be the criteria based on which users or merchants will choose a particular mobile wallet.
Do you think that usage of mobile wallets among merchants will now increase? What other changes can this order trigger? Do let us know your opinions by commenting right here!