Between m-wallets fund transfer should be allowed by RBI

The Reserve Bank of India (RBI) is considering a proposal to allow fund transfer between two mobile wallets, a move that will give boost to e-commerce transactions and provide customers options to manage their funds. M-wallet —is similar to saving accounts wherein a customer parks money – is provided by few banks such as Pocket by ICICI BankBSE -2.81 % and pre-paid payment issuers (PPI) such as Paytm and MobiKwik.

National Payments Corporation of India, the government backed payments gateway, has proposed to the RBI in a recent interaction that inter-operability between PPIs will be an added service from which customers would benefit and give boost to cashless transactions. AP Hota, MD & CEO of NPCI indicated at the sideline of announcing a tie-up with R S Software as their back-end technology partner for Unified Payments Interface (UPI).

As of now, a customer can use the m-wallet for making payments such as utility bills, recharge mobile phone or even shop online. However, the customers can not withdraw money from m-wallet or transfers that money to m-wallets of other banks or PPIs. The move will benefit close 45 PPIs who are authorised by the RBI. He indicated that RBI’s concern may be centred around money laundering since m-wallet do not have to follow know your customer norm while opening accounts with them.

The UPI will allow instance fund transfer using smart phones between customers of two different banks. Although the RBI is yet to give a formal approval for UPI. The service will allow users to send and receive money electronically without requiring bank account information. The user will need a single identifier such as their Aadhaar number or a mobile number or a short payment address like an email address. However, a customer using UPI for fund transfer will need to have a smart phone and a bank account.

The company would roll out the service by September but at the same time he is keen that more banks agree to join the service. “We want to get started with 50 banks. Only than the success is visible.”