As a part of Government’s digitization campaign, Reserve Bank of India (RBI) is planning to open up the Unified Payment Interface (UPI) platform for widely used digital wallet services in the country. With the unified platform, digital wallet upstarts like Paytm and Mobikwik will be inter-operable and have access to the UPI framework. Witnessing the large-scale acceptance of digital payment platforms and large chunks of bank transfers, the RBI is now opening up the platform to them.
The central bank will further issue detailed guidelines and procedure for mobile payment companies on interoperability and ‘know your customer’ (KYC) norms. It is currently involved in the preparation of the same and will publically release the documents in the coming few weeks. The development was traced by ET which added that RBI will also decide the interchange fees between wallets to enter the UPI system.
Speaking of the progress of integration, an anonymous source told ET,
The opening up of the UPI framework and, in turn, the permission to allow interoperability between wallets is something the RBI is looking into very seriously and should be able to activate in 2-3 months.
Currently, the approach to UPI framework by these mobile wallets is limited to their partner banks, which allow bank-to-bank money transfers. However, introduction of the Unified Payment Interface (UPI) platform by RBI will provide a direct access to e-wallets like FreeCharge or MobiKwik.
With the application of this platform, a merchant having installed a mobile solution on his smartphone will be able to directly transfer money to another users’ e-wallet account. It means you’ll soon be able to transfer money from your Paytm account to your Mobikwik account directly.
The said move will not provide marketing advantages to these companies but will enhance the usability of these instruments. Post demonization, the user figures for these companies showed a massive jump, especially in the case of Paytm. Allowing a direct inter-wallet proposition to merchants will further ease the operation and money transfers to a great extent.
Along with the promotion of private digital payment solutions, RBI is also extensively popularising Government’s BHIM application (Aadhaar-based payment platform) and instruments channelizing transactions via QR codes. These efforts are being taken up so as to transform the Indian economy into a digitally forward nation.
On extension of UPI technology to e-wallets, Bipin Preet Singh, chief executive of MobiKwik, said,
The company is keen to partner with other financial networks to develop a collaborative financial services platform.
Adding to that, Bhavik Vasa, Chief growth officer at ItzCash said,
Interoperability will strengthen the business model of a wallet since the players will not need to acquire both merchants and customers, Gradually, the market will start expanding as the ecosystem is built.