The RBI's new guidelines will allow you to transfer funds between different mobile wallets

• On 16 October, the Reserve Bank of India (RBI) issued a set of guidelines pertaining to the transfer of money between different mobile wallets such as Paytm, Oxigen and MobiKwik.
  
• The quick and seamless transfer between mobile wallets will make them a natural substitute for bank accounts and lead to a spurt in digital payment transactions.
  
• As of right now, e-wallets function as closed-loop systems, which means that funds aren’t allowed to be transferred between mobile wallets run by different companies.

On 16 October, the Reserve Bank of India (RBI) issued a set of guidelines pertaining to the transfer of money between different mobile wallets such as Paytm, Oxigen and MobiKwik, which are formally categorised as “pre-paid instruments”. As of right now, e-wallets function as closed-loop systems, which means that funds aren’t allowed to be transferred between mobile wallets run by different companies.

The quick and seamless transfer between mobile wallets will make them a natural substitute for bank accounts. It will also enable issuers of mobile wallets and customers to clear and settle transactions using one platform instead of multiple payment systems.

The rules allow for the transfer of money between one mobile wallet to another, and from a mobile wallet to a bank account and vice versa through the Unified Payments Interface (UPI), the instant payment transfer system developed by the National Payments Corporation of India for transferring funds between bank accounts through mobile apps. The system is regulated by the RBI.

The process of “interoperability” will be implemented in a phased manner. The first phase - to be completed within the next six months - will involve the transfer between different mobile wallets while the second will involve the transfer between mobile wallets and accounts registered with scheduled commercial banks. The third and final stage will involve the issuance of stand-alone payment cards by mobile wallet providers.

All mobile wallet accounts that are in compliance with KYC norms will be eligible for money transfers. There will be no minimum net worth requirement. In addition to addressing the interoperability of e-wallets, the guidelines also comprise avenues for customers to escalate grievances.

The move by India’s central bank is aimed at facilitating a spurt in digital payment transactions, which are already growing at a commendable rate, which is surprising given the plethora of know-your-customer (KYC) requirements that digital payments firms have been faced with since March. For example, in August 2018, the number of e-wallet transactions reached a total volume of ₹155.7 billion - a record high.