Even though the Reserve Bank of India is bypassing restrictive rules and regulations from time-to-time to decongest the digital wallet industry, global digital payments major PayPal may just make its entry in the field. According to a report by ET Tech, the company is seeking a prepaid payment instrument (PPI) licence to enter the competitive mobile wallet space of India.
It is currently being suggested that the company had applied for a licence long before September. This seems to be justified following the RBI’s prohibition on PPI applications since September — up until the time,it lays down new guidelines. In addition, sources cited mention,
PayPal is interested in getting a wallet licence and has discussed this with some industry associations.
Although both RBI and PayPal have declined to comment on the matter, the sources revealed that the company is pushing industry bodies for a faster proceeding. We’ve contacted PayPal for more information and will update you once we hear back from them.
This report has surfaced mere days after a PPI licence was granted to Amazon India earlier this month. The licence granted by RBI is valid only until 31 March, 2022 and will allow the e-tailer to operate its own payment gateway. It is expected that the company might link its wallet service (possibly underway!) to Amazon Pay – an already existing payment checkout option.
From what it seems, the global giants are now also looking to ride the digitization wave in the country. Moreover, the immensely high rate of adoption of e-wallets post demonetization further bolsters their decision.
We’re all aware how RBI has become a keen watchdog for supervising companies by regulating amendments and introducing new drafts. In a similar attempt, the central bank issued new robust guidelines for digital wallets operating in the country, last month. It not only raised the minimum capital requirement for digital wallet providers to ₹25 crore but also mandated full compliance with Know-Your-Customers (KYC) norms. This has been coupled with the introduction of limitations on domestic remittances.
RBI also noted that a digital wallet provider has to comply with the KYC requirements within six months of a customer opening an account, which provides a certain time relaxation to the companies.