Soon Inter-operability To Allow Transactions Between Different E-wallets
E-wallets are used everywhere right from supermarkets to hospitals. Almost every vendor in India accepts payments through e-wallet services such as Paytm and MobiKwik.
Demonetisation showed us the power of e-wallets and how useful they can be for day to day activities. But even then, there existed a small problem – the transactions existed between e-wallets belonging to the same company. For example, a Paytm user can send and receive money only from another Paytm user, transactions between Mobikwik and Paytm accounts were not possible.
Nowadays many e-wallets are coming up making the transactions harder. The government of India released UPI (Unified Payments Interface) which allowed the users of different banks to make the transactions provided if the digital wallet is built on the UPI platform. UPI platform became an instant hit because it allowed the users to make the payments without the requirement of remembering even the bank account number and the IFSC code.
To make transactions easier, RBI announced that the e-wallets such as Paytm and Mobikwik which are compliant with KYC (Know Your Customer) terms can be interoperable i.e. transactions between both the e-wallets will be possible. This will happen in less than six months.
But some systems such as PhonePe developed by Flipkart partnered with YES Bank to access the UPI platform from the start to enable transactions between them and some wallets such as BookMyShow’s wallet accepts transactions from various other e-wallets such as Paytm and MobiKwik. Google recently launched Tez, built on UPI platform which became a sensation due to its ability to act as an extension of the bank account. It also has a sleek design with an intuitive and light interface which makes the banking easier than ever before.
Interoperability makes it easier for merchants to make their payments easier and faster. With the RBIs change in the guidelines involved in Payment Protection Insurance, one of the biggest hurdles in digital wallets is eliminated. Freecharge and MobiKwik are all set to merge their companies.
However, some experts doubt that interoperability is late. With UPI customers in India are already making transactions in seamlessly. Added to that some digital wallet providers have questioned whether going compliance with KYC norms would increase customer acquisition costs and increase the complexity of the e-wallets. However, still, most of the people use e-wallet services such as Paytm, which has launched the Paytm bank and the inter-operability will help them immensely.