Mobile wallet interoperability soon with riders

BENGALURU: Mobile wallet interoperability could finally see the light of the day but with a condition of higher capital requirement imposed on licence holders by the Reserve Bank of India, according to payment industry executives familiar with the matter.

While RBI is yet to allow transactions between different mobile wallets, the digital payments industry is abuzz with talk on an imminent announcement of the final guidelines. “We have learnt that interoperability could be opened for only those players with a positive net worth of Rs 25 crore, thereby ensuring only the major wallet companies are allowed in this space,” said the chief executive of a Delhi-based payments company.

Since the matter is under regulatory purview, payment company executives chose to speak on condition of anonymity.

RBI did not immediately reply to a mail seeking comments. Nearly 50 companies hold prepaid payment instrument (PPI, or digital wallet) licences but several would not be able to meet a Rs 25-crore threshold, according to industry estimates. The existing requirement is for a net worth of Rs 5 crore that has to be increased to a positive net worth of Rs 15 crore within three years of operation.

“Payment banks have lobbied to the Central bank saying that if wallets are given interoperability then their business strategy will get severely challenged, since wallets will also manage to offer similar products and facilities,” said a top executive at a Mumbai-based payments firm.

ET reported last month that CEOs of payment banks had passed a resolution to approach RBI on the potential for wallet interoperability to cause ‘regulatory arbitrage’. In spite of opposition from a section of the payments industry, RBI promised interoperability to mobile wallets in its ‘master directions’ issued at the end of last year. It promised phased interoperability for wallets within six months of issuing the master directions, but there has been no progress yet.

Industry insiders believe the introduction of higher net worth requirements would usher in the final guidelines by RBI.

“There are more than 40 licensed PPI holders, all of them of varied sizes and capabilities. Bringing all of them at par on the same platform could have been a huge challenge. This way, at least, the serious players will start offering the new interwallet payment services to their customers,” said one of the persons quoted above. While one section of the industry is looking forward to this increased threshold, small and mid-sized companies are worried about their sustainability.

The founder of a Mumbai-based domestic remittance company said many small players had already lost customers because of RBI’s customer verification rules. The know-your-customer rule has also increased the cost of business because of capital expenses on biometric dongles at retail outlets, he said. “Now, if interoperability is restricted to bigger players, then there would not be any business case left,” he said.