Mobile Wallets (Google Pay, Paytm): 3 Must-Know Changes From RBI

A mobile wallet, unlike its physical equivalent, is a digital wallet into which we can deposit money using our credit/debit cards and make payments. It's essentially a prepaid electronic account that can be used to pay for anything. Mobile wallets can be used for anything from shopping to bill payments to movie tickets.

Mobile wallet falls under the category of Prepaid Payment Instruments (PPIs). These are payment instruments that facilitate the purchase of goods and services, including the transfer of funds, financial services, and remittances, against the value stored inside or on the instrument, as specified by the RBI under the Payment and Settlement Act, 2005.

From April 2022, a mobile wallet user who has been thoroughly screened and has met all KYC requirements will be able to send and receive money from multiple mobile wallets, according to the RBI. These are the 3 latest changes made by RBI.

Prepaid Payment Instruments (PPIs) -
1. Mandating Interoperability;
2. Increasing the Limit to ₹2 lakh for Full-KYC PPIs; and
3. Permitting Cash Withdrawal from Full-KYC PPIs of Non-Bank PPI Issuers

Wallet Interoperability

Mobile wallet issuers must provide full-KYC PPI holders with interoperability via authorized card networks and UPI for PPIs in the form of electronic wallets. This means they should be able to send and receive money from a number of different mobile wallets. PPIs for Mass Transit Systems (PPI-MTS) will be excluded from interoperability until March 31, 2022, and Gift PPI issuers will have the option to provide interoperability.

Increasing the Limit to Rs2 lakh

The maximum amount outstanding for full-KYC has been raised from Rs 1 lakh to Rs two lakh. This means one can hold a maximum amount upto Rs 2 Lakh in your wallet.

Cash Withdrawal

Per PPI, there is a maximum limit of 2,000 per transaction and a monthly limit of 10,000. This means one can withdraw cash upto Rs 2000 per transaction with a monthly limit of Rs 10,000. An Additional Factor of Authentication (AFA) / PIN must be used to authenticate all cash withdrawal transactions made with a card or a wallet.

Cash withdrawal limit from Points of Sale (PoS)

The cash withdrawal cap from Points of Sale (PoS) terminals in India using debit cards and open system prepaid cards issued by banks has been reduced to Rs 2,000 per transaction, with a monthly limit of Rs 10,000 across all locations.

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