Paytm, PhonePe, Google Pay mobile wallets to become interoperable, here’s what it means

All mobile wallets in India, including PhonePe, Paytm, Google Pay and Mobikwik, will have to allow interoperability from FY23 i.e. from April 1, 2022, according to the Reserve Bank of India’s (RBI) latest order aimed at simplifying digital banking in India. 

The rule is applicable to all licensed prepaid payment instruments (PPIs) in the country beginning April 2022. The decision was taken after the Monetary Policy Committee meeting in April 2021. 

What does interoperability mean? 
 
In this case, interoperability among mobile wallets will let valid users with verified KYC send and receive money from various mobile wallets. This means that you’ll be able to send your money from PhonePe wallet to Paytm wallet or Mobikwik wallet or vice versa. RBI said that digital wallets can facilitate interoperability via the UPI (Unified Payments Interface).
 
Is interoperability limited to mobile wallets? 

The RBI said that card-based PPIs can accomplish interoperability through card network interoperability. Only PPI for Mass Transit Systems (PPI-MTS) has been exempted from interoperability. RBI said that GIFT PPI issuers have the option to offer interoperability. 

"Any PPI issuer offering this facility shall put in place proper customer redressal mechanisms. Complaints in this regard shall fall under the ambit of the respective ombudsman schemes and instructions on limiting liability of customers," RBI said in its circular.

What other changes are coming? 

RBI said that customers will be able to use their mobile wallets for cash withdrawals of up to Rs 2,000. RBI has also expanded the wallet limit to Rs 2 lakh from Rs 1 lakh. "PPI issuers shall put in place suitable cooling periods for cash withdrawal upon opening the PPIs or loading/ re-loading of funds into PPIs to mitigate the risk of fraudulent use of PPIs," RBI noted.