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Payment services operated under financial regulation and performed from or via a mobile is known as Mobile payment wallet. Mobile payment wallet also referred to as mobile money, mobile money transfer and mobile wallet.
RBI is regularity and issuing authority for Payment wallet license or prepaid payment wallet license in India.
RBI is responsible for issuing guidelines and rule for prepaid payment wallet and responsible for granting the incense.
Prepaid or payment wallets have been classified into four categories by the RBI:
A. CLOSED SYSTEM PAYMENT
B. SEMI-CLOSED SYSTEM
C. OPEN SYSTEM
It is a wallet which is issued by a company to a consumer for buying goods and services exclusively from that company. Example: Amazon, Cleartrip etc
You can use this
a. To receive refunds for receive and receive cashback
b. You can do purchasing
Semi-closed PPIs can further be classified into the following three types:
i. PPIs upto ₹ 10,000/- where minimum details of PPI holder are obtained (minimum-detail PPI)
ii. PPIs upto ₹ 10,000/- with loading only from bank account
iii. PPIs upto ₹ 1,00,000/- where KYC of PPI holder is completed (full-KYC PPI)
It is used to purchase of goods and services and also permit cash withdrawal at ATM. Example- Visa card, Master card, Rupay card.
You can use this
a. For cash withdrawal at ATM
b. Payment(s) made on purchase of goods and services by swiping card(s)
c. Use through POs machine for making payment
Semi-closed wallets refer to those wallets that can be used to purchase goods and/or services as such a wallet is a payment instrument that are redeemable of clearly identified merchant that contract specifically with the issuer to except the payment instrument. Example- Paytm, Mobikwik, Freechare etc.
You can use it
a. Pay to affiliated merchant for purchasing goods
b. Purchase from wallet issuer
c. transfer money
➲ Non-Bank Finance Companies (NBFC) and banks, who comply with the eligibility criteria, would be permitted to issue all categories of prepaid payment instruments.
➲ Certain banks have been permitted by the Reserve Bank of India to provide Mobile Banking Transactions by. Such banks shall be permitted to launch mobile based prepaid payment instruments (mobile wallets & mobile accounts)
➲ In other cases, entities would be permitted to issue only closed system prepaid payment instruments and semi-closed system prepaid payment instruments
➲ Commercial Banking institutions and NBFC’s (Non-Bank Finance Companies) which comply with the Capital Adequacy requirement laid down by the Reserve Bank of India from time-to-time shall be permitted to issue prepaid payment instruments.
➲ Entities other than a bank or NBFC shall have a minimum net owned funds of Rs 5 crores in order to attain a prepaid wallet license.
➲ Name of the applicant Entity
➲ Constitution of the applicant Entity
➲ Address proof of registered office of the business
➲ Certificate of Incorporation
➲ A detailed report of the principle business of the company
➲ Benefits expected to the Indian Financial system from the company
➲ List of Directors and List of Shareholders
➲ Details of statutory auditor of Company
➲ Quantum of capital proposed
➲ Details of sources of funds
➲ Latest audited balance sheet of the Company
➲ Payment system details with process flow, technology, security features and interoperability
➲ Details of Bank Account and Bankers of Company
➲ Any other documents as may be required
Incorporation of the Company under the Company act, 2013 with main objects in consonance with that of a prepaid payment instrument.
Preparation and filing of Application for Payment Wallet Licence in Form A with the payment of adequate fee as prescribed under the Payment and Settlement System Regulations, 2008.
The application so filed undergoes the process of initial scrutiny of the application by the RBI to ensure the correctness of the application and the attachments filed and eligibility of the Company and its promoters and directors.
Subject to completion initial scrutiny to the satisfaction of the RBI, the designated office of the Reserve Bank of India issues an ‘in-principle’ approval which shall be valid for 6 months.
The entity receiving the “in-principle” shall mandatorily submit a Systems Audit Report to RBI within these 6 months, otherwise, the in-principle approval shall be deemed to lapse on expiry of 6 months. There is a provision to obtain a one-time extension of six months by such applicant, which shall be approved only if there is a genuine reason for the delays caused. The RBI has the discretion to the accept or decline such request for extension based on the reasons stated.
If the RBI is of the view that the specifics and facts provided by the applicant in the application are satisfactory and as per the respective provisions, the RBI grants the Certificate of Registration to the applicant within the six months of in-principle approval. However, if the Certificate of registration is not granted, then the in-principal approval shall lapse at the completion of 6 months. The Certificate of Registration granted by the RBI is valid for 5 years and shall be subject to a periodic review
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The Payment Card Industry Data Security Standard (PCI DSS) is a set of security standards designed to ensure that all businesses accepting, processing, storing or transmitting credit card information maintain a safe environment.
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