prepaid card: RBI makes prepaid cards, digital wallets interoperable
MUMBAI: Any prepaid card or digital wallet, where the customer has completed KYC procedures, can be used interoperably with other prepaid instruments. Announcing its guidelines on Wednesday, the RBI said that even gift cards can be made interoperable by issuers through the UPI platform.
The new norms are a boost for issuers of prepaid digital wallets as they do not need to build a large merchant network that accepts their e-wallets. Any merchant that accepts UPI will be able to accept payments from any new prepaid issuer. The RBI has also made merchant acquirers ensure that any merchant who accepts payments from one prepaid wallet or prepaid card will accept payment from all issuers.
Issuers have been given up to March 2022 to enable interoperability. As announced in its monetary policy in April, the RBI also hiked the maximum amount outstanding in respect of full-KYC issuers to Rs 2 lakh. The move makes prepaid instruments, also known as PPIs, almost on a par with payment bank accounts. This is because PPI customers will be allowed to withdraw money from the ATM.
The only PPIs that are excluded from the interoperability requirements are mobility cards like those used in metros or FASTag, which are largely closed-loop instruments, meaning they can be used only for specified transactions.