The persons cited earlier told ET that Visa, MasterCard and RuPay had held meetings with the prepaid payment instruments (PPI) licence holders in the middle of December on the integration process and the technological and other requirements for issue of interoperable payment instruments. Implementation of ‘interoperability’ requires technical compatibility to enable a payment system to be used in conjunction with other payment systems. While the timeline for its rollout is yet to be decided, industry executives have said that it will take at least six months.
Mobile wallets companies, which till recently were allowed to issue prepaid cards only in partnership with banks, will be able to issue their own branded prepaid cards after interoperability is enabled on their systems. Consumers will be able to use these cards at merchant outlets and for online shopping. They will not be able to use them to withdraw cash or for international transactions, though.
“We have already had preliminary discussions with the card schemes on how to take the integration forward, but these are still early days. We are yet to decide on the partner,” said Abhishek Sinha, founder of Delhi-based wallet company Eko India Financial Services, which offers domestic remittance services.
Mumbai-based payment company PayPoint is also looking to jump on to the card payment bandwagon through interoperability.
Ketan Doshi, managing director of Pay Point India Network, said he has attended meetings with multiple card schemes, but has not decided on a partnership yet.
“We have been actively engaging with all key Indian PPIs through in-depth workshops,” said Aman Ahuja, vice-president, market product management, MasterCard, in a written reply to ET’s query. “We believe over 25% of all PPIs will partners directly on card-based solutions within this year.”
Confirming the move, a Visa spokesperson said the company is engaged with multiple wallet companies and has recently launched a fastrack programme for fintechs to enable them with quicker onboarding, certification and to help them with a quicker ‘go-to-market’ timeline.
Industry insiders have said that interoperability will be able to open a whole new set of use cases for mobile wallets which are otherwise facing increased competition from Unified Payments Interface and debit cards. However, the challenge for them is to get full details or KYC (know your customer) of their customers, which is mandatory to make the wallet interoperable. “After the Aadhaar verdict, eKYC has been stopped and that has caused a major problem for us in customer onboarding,” said a top executive of a payments company.
“We are hoping to get clarity on that front as well.” While interoperability is being seen as infusing life in the business of wallet companies, it will mean shouldering a considerable cost to be able to on board the Mastercard and Visa railroads, especially since payment companies operate on wafer-thin margins in a hugely competitive industry.