Wallets Oppose New Inter-operability Regulation – In Fear

Wallet companies fear new rules may cripple industry – Opposes New Inter-operability Regulation.

While on Oct 5th I wrote to you about the positive side of this regulation hitting the payment-industry “Mobile Wallet – InterOperability – Who gets the Boost?

Here’s a view about why the Wallet Champions are upset of the most awaited RBI Regulation.

Payments Council of India feels the new regulations drawn up by India’s central bank to oversee digital payment companies would cripple the sector.

The Payments Council of India, an industry grouping, has already written to RBI seeking a hearing on issues they deem as “critical” to the industry. They felt some of the provisions would ‘cripple’ the industry.

Companies such as Paytm, MobiKwik and FreeCharge made a killing move with sharp rise in transactions since “Demonetization”.

However, the stringent regulations drawn up by India’s central bank Reserve Bank of India (RBI) to oversee digital payment companies have prompted the industry to join forces and seek changes in a few of the stipulations, reports Eco.Times

The Payments Council of India, an industry grouping, has already written to RBI seeking a hearing on issues they deem as “critical” to the industry. They felt some of the provisions would ‘cripple’ the industry, the daily added.

Their major points of concern are the RBI’s demand for a mandatory full KYC or know your-customer certification, phased introduction of interoperability and restriction of peer-to-peer fund transfer in semi-KYC wallets.

Companies believe the prohibition of inter-wallet transactions, along with transfer of funds from bank account to wallet from semi-KYC accounts, will destroy the relevance of mobile wallets.

Digital wallets have largely been viewed as a preferred mode of fund transfer for small value and among people who cannot easily open a bank account. The domestic remittance business is based on mostly migrant workers using prepaid instruments to send money home.

As these workers keep traveling to different places in search of employment, they find it difficult to furnish local address proofs. Hence in such cases doing a full-KYC to open a digital wallet every time will be a major hindrance for smooth business, the daily added.

Revised Guidelines Too Stringent’

The revised guidelines are more stringent than they need to be.” Another major hurdle for payment companies is prohibition of inter-wallet transactions, along with transfer of funds from bank account to wallet from semi-KYC accounts, which the companies believe will destroy the relevance of mobile wallets

ADD YOUR COMMENT