NEW DELHI, India—In a move that some analysts suggest foreshadows how new payment technology can disintermediate FIs, a move by the Reserve Bank of India allows a mobile wallet user, who has fulfilled all know-your-customer (KYC) norms, to send and receive money from different mobile wallets, including the likes of Paytm and PhonePe.
In a recent circular, the Reserve Bank of India (RBI) has made mobile wallet interoperability mandatory effective in 2023, which experts say would put the non-bank prepaid payment instruments (PPI) issuers or the digital wallets at par with traditional bank accounts in terms of services offered. The move, they say, will enable wider usage and penetration of digital payments, The Indian Express reported.
Greater Level Playing Field
Shilpa Mankar Ahluwalia, a partner at Shardul Amarchand Mangaldas & Co., said that the new RBI norms will create a much greater level playing field between bank and non-bank PPI issuers. Additionally, mobile wallets can now be used for cash withdrawals up to Rs 2,000.
“These quasi bank payment features will enable much wider usage and penetration of PPIs pushing the growth of digital payments in the country,” Mankar added.