And finally, a new digital world begins in India.
According to RBI, new guidelines are issued, in which payments between e-wallets and cards are possible now.
This means now users can transfer money between wallets and cards, from cards to wallets, and from wallets to cards seamlessly. However, the main condition is to do transactions via UPI.
RBI Guidelines for Inter-wallets transactions
The Committee had issued the deadline of February 9th, 2017 for issuing guidelines. However, it took almost 1.8 years for finalizing and issuing the guidelines .
The guidelines for the inter-ewallet transactions has been issued in three layers:
- Interoperability of wallets, using UPI.
- Interoperability between wallets and card companies, using UPI.
- Interoperability between different cards, using the card network.
Why UPI is must to do transactions ?
As told above, to do these transactions (between ewallets and cards or cards to ewallets), UPI is compulsory.
The main reason to do so is that, RBI wants that UPI is used more and more.
Suppose you have some money in Paytm, and want to transfer to a friend who is using freecharge. You can do it by using UPI for transferring money to your friend.
However, in case you have Mastercard, and your friend who has Visa debit card, wants to transfer the money, then UPI is not compulsory, here you can use the existing card network.
Is Interoperability Compulsory!
RBI has made it clear in their guidelines that this new interoperability feature is not mandatory for PPI (Prepaid Payment Instruments) issuers. Hence, wallets and cards have to choice whether they want to use interoperability feature or not.
However, we think that, ewallet or any card provider will not introduce this feature as who want to isolate themselves.
Another interesting fact is that Interoperability has also been allowed for other segments such as ‘meal, gift and mass transport system’.
Another condition is that only KYC enabled PPI’s will be able to participate in the interoperability operations.