Reserve Bank of India (RBI) will enable the users to transfer funds among prepaid payment instruments (PPIs) within six months.
The central bank in its statement said: “In line with the vision for payment and settlement systems in the country, the revised framework will pave the way for bringing interoperability into usage of PPIs.”
RBI previously issued guidelines for issuance and operations of PPIs in April 2009 to develop the pre-paid ecosystem. The revised guidelines for interoperability will now be issued by 11 October 2017.
Digital transactions have been growing rapidly in India after the government demonetised high value currency notes late last year. This initiative will not only help the users but will also benefit the merchants who are accepting the digital mode for payments.
Digital payments firms like Paytm, MobiKwik, FreeCharge will benefit the most by the new guidelines, as fund transfers between different wallets will become much easier.
Commenting on the move, MobiKwik founder and CEO Bipin Preet Singh said: “Interoperability was one of the key challenges in increasing the adoption of digital payments in India, and RBI’s latest direction in this regard will provide a homogenous environment for the growth of mobile wallets.
“For the user, this means that they do not have to download another wallet if they already have MobiKwik.They can pay across the merchant network of any other PPI. This helps us widen our reach and brings enormous value to our business. Collaboration and co-ompetition are going to drive the digital payments industry into its next phase.”
As per the Google and Boston Consulting Group report, digital transactions is expected to reach $500bn by 2020, contributing 15% to India’s GDP.