RBI removes walls between e-wallets, soon a Paytm user can transact with a MobiKwik user

Inter-operability to help players increase business

To make the use of digital cash more prevalent and convenient, a digital wallet user would soon be able to accept cash from the user of another Ewallet, because of the Reserve Bank of India (RBI) tweaking its guidelines.

Current Affairs News : For example, a Paytm wallet user would soon be able to accept cash from a PhonePe wallet user.

Opening up the strings of digital wallets, the RBI on Wednesday said it would issue revised directions by October 11 to allow “inter-operability” among prepaid payment instruments (PPIs). These include digital wallets, prepaid cash coupons and prepaid telephone top-up cards. PPIs are a substitute for paper currency.

It is expected that PPIs can inter-operate within six months of the revised directions, the RBI said in its “Statement on Developmental and Regulatory Policies”.

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The RBI said the feedback received was examined and it was decided to rationalise the operational guidelines with a view to encouraging competition and strengthening security of operations, besides improving customer grievance redressal mechanisms.

The first guidelines for issuance and operation of PPIs came in April 2009 with the objective to create an ecosystem. In March, the RBI asked for feedback on the PPI industry. At present, two people using the same digital wallet can do transactions; in less than six months, people using digital wallets from different companies would be able to send and receive money from each other. Read More

BharatQR, UPI, BHIM, NUUP: How these digital payment apps, services work

The growth of digital payment services is fueled by introduction of apps and services by the NPCI

As India leaps toward a digital economy, the adoption of digital payment platforms is on the rise as well. Before the demonetisation drive, which started on November 8, 2016, there were a handful of digital wallet services -- PayTm, FreeCharge and MobiKwik. But, none of them offered comprehensive digital payments structure and had their own limitations.

As the government shifts focus toward cashless society, it also pushed a bouquet of digital payment options in the form of apps and USSD services like BharatQR code, Unified Payments Interface (UPI), BHIM app, and National Unified USSD Platform. These services were introduced alongside existing banking services such as internet banking, mobile banking and immediate payment service (IMPS).

Let’s take a look at these digital payment options and how they function:

BharatQR code

BharatQR code is a National Payments Corporation of India (NPCI) and payments companies, Mastercard and Visa led initiative to enable digital payments without card or card swiping machines.

Quick response (QR) codes carry certain information that could only be decoded with the help of a QR code scanner and that is exactly what BharatQR code does. Banks have been integrating BharatQR services to their existing mobile apps and therefore no extra app or service is required to exercise BharatQR. (more)

No transaction charges on debit card payments: Govt

The move comes after govt reviewed the situation post demonetisation of 500 and 1,000 rupee notes

To encourage widespread usage of digital payments post demonetisation, the government on Wednesday said no transaction charges will be levied on debit cards till December 31.

All public sector banks and some private sector ones have agreed to waive the transaction cost for all payments made through Debit Card Payments, Economic Affairs Secretary Shaktikanta Das said.

The move comes after the government reviewed the situation post demonetisation of 500 and 1,000 rupee notes and decided to encourage digital payments.

"Public sector banks and some of the private sector banks, and some of the service providers who provide switching services, have agreed to waive the service charges on the use of debit cards up to December 31, 2016," Das said.

As of now, Rupay debit cards have already waived the switching charges. Other debit cards which operate international card network companies like Mastercard and Visa, currently charge transaction charges.

So far, customers bear the transaction cost commonly known as merchant discount rate (MDR) on payments made to the government.

"The MDR charges on use of debit cards, the charges being levied by the banks and the switching charges will stand completely waived. So, there will be no charge on use of debit cards. Read More