The Reserve Bank of India (RBI) has today made it mandatory for prepaid payment instruments (PPI) to ensure interoperability by March 31, 2022. This includes mobile wallets from popular UPI apps such as PhonePe, Paytm, and even prepaid cards.

Mobile Wallet Interoperability by April 2022

What does this mean for users of digital payment platforms in India? Going forward, you will be able to send and receive money across different mobile wallets if you have completed KYC verification. This is done through authorized card networks for card-based PPIs and UPI for e-wallets.

“It shall be mandatory for PPI issuers to give the holders of full-KYC PPIs (KYC-compliant PPIs) interoperability through authorized card networks (for PPIs in the form of cards) and UPI (for PPIs in the form of electronic wallets),” said RBI in its notification.

In addition, you will be able to use a prepaid card or wallet for withdrawing cash at ATMs, micro-ATMs, and eligible Point of Sale terminals soon. For cash withdrawal, full-KYC PPIs issued by non-bank PPI issuers have a maximum limit of Rs. 2,000 per transaction and a limit of Rs. 10,000 per month. These transactions will require an additional factor of authentication or PIN.

The notification also highlighted that the maximum limit has been increased from Rs. 1 lakh to Rs. 2 lakh for customers of full KYC-complaint PPIs such as mobile wallets.

Meanwhile, RBI has also put some security measures in place to avoid fraud. “PPI issuers shall put in place suitable cooling period for cash withdrawal upon opening the PPIs or loading / re-loading of funds into PPIs to mitigate the risk of fraudulent use of PPIs,” as per the circular.

RBI pointed out two notable exceptions to this rule in its notification – PPIs for Mass Transit Systems (PPI-MTS) and Gift PPI issuers. While PPI-MTS such as metro cards and FASTag will remain exempted from interoperability, gift PPI issuers can choose to provide the said feature to users.

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