Your mobile wallet can soon turn into a debit card- MoneyBite Newsletter 10 Apr
Short bites to keep you informed of matters that impact your wallet and wealth
This week RBI kept its benchmark rates unchanged in its first policy meeting, which means your loan interest rates and the deposit rates remain pretty much the same. This move was expected and is required to support the growth of the economy through this phase.
Top Bite this Week
Your mobile wallet can turn into a debit card soon
What’s happening here?
Along with the monetary policy review on 07 Apr 2021, the RBI said that it will soon allow your mobile wallet to be used like a debit card.
What’s the existing scenario with your mobile wallets?
The demonetisation and the pandemic have been big drivers of increasing usage of mobile wallets and digital payment solutions in India. Among the popularly used options are mobile wallets like Google Pay,PayTM, Phone Pe or Prepaid instruments like Oxigen or Mobikwik.
Then there are certain mobile wallets issued by the banks to their account holders like the SBI Yono, HDFC Pay Zapp, or ICICI Pockets. The ease of usage of these wallets has brought everyone from the digitally savvy to the roadside vendors into the user fold. Collectively, all these wallets are referred to as Prepaid Instruments(PPIs).
While some of the wallets like Google Pay can be linked with your bank and don’t need any cash to be loaded before making transactions, many others require you to transfer cash through your credit card or bank account before you make any transactions. The money stored in each of these wallets is exclusive and cannot be used by other wallets which can get really annoying at times. We all have had these moments, right?🙄
Looks like the RBI just heard our woes.
What are the proposed changes?
To improve digital payments adoption among the general public, the RBI has proposed these changes
- To use wallets, you would have to complete full KYC like the ones done at banks and other financial service providers. You would need to provide your PAN and proof of address to complete your KYC process.
- You can hold up to Rs 2 lakhs in mobile wallets. The earlier limit was Rs 1 lakh. This amount is increased so that individuals find it more attractive to use the wallet even with KYC norms.
- Prepaid instruments with full KYC will have to mandatorily offer interoperability. In other words, you can use the balance in one wallet across other wallets. The RBI had allowed voluntary interoperability in 2018 which had not found much favor with the mobile wallet operators. So users could not use balances across the wallets.
- You would soon be able to withdraw cash from your mobile wallet from ATMs just like you withdraw cash from your debit card. So, your wallet could turn into a debit card and act like one. Isn’t that cool?
These changes will take sometime to come into force though.
How does it affect you and me?
You will have to complete your full KYC with the wallets to get access to all the services. This might seem a little inconvenient but the services might make it worth it. Interoperability will definitely make it convenient for you to utilise your wallet balances effectively. Cash withdrawals will also be helpful. Also as you can hold higher balances in your wallet, you may want to pay more attention to the security aspect of your wallet.