UPI will reinforce e-wallets' business model by partnering with other financial networks: MobiKwik’s Bipin Preet

15th Mar 2017
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The Reserve Bank of India (RBI) has announced the setting up of an interoperable system by opening up the Unified Payment Interface (UPI) for digital wallet providers. The framework will allow interoperability between wallets to streamline the transaction process for customers.

This interoperability can serve as a catalyst for achieving the country’s vision of a cashless society. Interoperability across all payment instruments and networks like Rupay, Visa, and Mastercard for banks and non-banks alike would lead to ubiquitous acceptance and hassle-free usage among consumers.

Mobile wallet

About the RBI’s announcement, Bipin Preet Singh, Founder, Director, and CEO, MobiKwik, told YourStory,

“MobiKwik's unique cash loading feature has been instrumental in introducing fresh capital in the formal economy by providing access to financial services to the unbanked. UPI can benefit immensely with access to these unbanked users. This system will help our 55 million-plus users to make payments directly to a merchant of other e-wallets. The UPI platform will reinforce e-wallets' business model by partnering with other financial networks.”

As reported by ET, the RBI is shortly expected to issue guidelines on interoperability and ‘know your customer' (KYC) norms for digital wallet companies.

“Complete interoperability will bring in seamless movement in the payments system and will improve acceptance of digital or electronic payments. Implementation of interoperability will lead to the strengthening of the business model of wallets as there will be no requirement of acquiring merchants and consumers,” Bhavik Vasa, Chief Growth Officer, ItzCash, told YourStory.

Bhavik further added that this move would bring in the kind of convenience that being able to use one bank's ATM card at another bank's ATM offers. Post the implementation of interoperability and further opening up the use of Visa, Mastercard, and Rupay's already interoperable networks, any consumer using one company's wallet would be able to transfer money to a user of another company's wallet. It is a key factor in the entire process of building India's digital ecosystem.

The move will eventually reduce the much-hyped competition between the UPI-integrated BHIM app and the digital wallet providers. The payment architecture too has evolved from National Electronics Funds Transfer (NEFT) and Immediate Payment Service (IMPS) to UPI and now BHIM.

Manish Khera, serial entrepreneur and investor in the impact space, particularly in financial inclusion, in an earlier interaction with YourStory said that UPI provides the customer with a universal handle which rides on the IMPS architecture. While many of the wallets already had the UPI architecture, standardisation has made it immensely interoperable, though there remains the next step of the universality of payment handles. The BHIM app embeds the UPI architecture and makes it convenient for face-to-face transactions to happen.

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