An Overview of Mobile Wallet License
Digitization of payment transactions is taking India's growth to the next level. Payments via digital wallets have become a new normal in people's lifestyles. These transactions have the oversight of regulators to avert any possibility of fraud. The future of mobile wallets is bright and if any business wants to get started with this venture, it has to secure a mobile wallet license, broadly known as Prepaid Wallet License, from the RBI. It is a non-negotiable condition as per the Payment and Settlement Systems Act, 2007. As per RBI, the Mobile Wallet License falls under Prepaid Payment Instruments (PPIs).
What is a Prepaid Payment Instrument (PPI)?
Prepaid Payment Instruments (PPI) allow for the purchase of goods and services, financial services, remittance facilities, etc, against the amount stored therein. To better understand what a Prepaid payment instrument is, think of it as a virtual bank from where you can conduct any transaction against the stored fund, which can be added from different sources, including bank, cash, credit card, debit card, and so on. To get started with this venture, one must apply for Mobile Wallet License in India. Reserve Bank of India holds the right to grant this license. The mobile wallet business is a PPI, which can exist in the following forms:
Understanding the types of PPI/Mobile Wallet licenses
RBI has classified PPI wallets into the following categories:
- Closed wallets: Closed wallets are largely found in the e-commerce space, where online stores provide exclusive virtual wallets to customers for making a store-based purchase.
- Semi-closed wallet: As the name suggests, these types of wallets remain functional within a specific group.
- Semi-Open Wallet: Semi-Open Wallet allows its holders to make a purchase at stores that accept digital cards.
- Open Wallet: The open wallet has a broad application as it allows its holder to make a purchase anywhere
- Cross-border transaction: Online cross-border transaction is also possible nowadays- thanks to upgraded RBI guidelines.
Benefits of a Mobile Wallet License
The following are the reasons to adopt an RBI PPI license or a Prepaid Payment wallet for conducting digital transactions:
Who can apply for Mobile Wallet License in India?
Listed below is the eligibility requirement for securing Mobile Wallet License in India:
- For banks and Non-banking financial institutions:
- For Non-NBFC
- FEMA-certified companies
Documents required for Mobile Wallet License in India
Process to Secure Mobile Wallet License in India
Following is the detailed process of securing a Mobile Wallet License from the Reserve Bank of India:
Validity of the Mobile Wallet License
RBI grants the Prepaid wallet license with a minimum validity of 1 year, which comes into effect from the date of last loading/reloading.
Rules to be followed by PPI issuers in view of Money Laundering
RBI has penned down some rules around money laundering for the issuers of PPIs. These norms are formulated by the Department of Regulation (DoR) functioning under the RBI. Let’s have a glance over these guidelines:
Norms around the Issuance of PPIs
All entities having the right to issue Mobile payment wallets can grant reloadable or non-reloadable PPIs.
What is the concept of Loading and Reloading PPIs?
Every PPI should have the authorization to be loaded/reloaded by cash in INR, debit by a bank account, debit and credit cards, and regulated payment instruments.
Norms the hiring and tracking of Authorized Agent for banks
Banks and non-banks must have the power to load/reload PPIs via approved agents subject to the given guidelines:
Let Corpbiz’s Experts deal with the Mobile Wallet License process
Corpbiz has been a spearhead in licensing regime since 2013. With almost a decade old experience and the trust of thousands of satisfied clients pan India, we are now poised as a leader in what we do. We are well-versed in PPI licensing complexities, endless norms, and complicated paperwork. Our unprecedented quality of rendering different government permits and license in one go make us a one-of-a-kind service provider. Let us know what you need, we will never disappoint you.