The Reserve Bank of India (RBI) is planning to tighten rules for mobile wallets and prepaid payment instruments (PPIs), and the move has created concern across the digital payments industry.
Several payment companies now fear that the proposed rules could reduce business opportunities and affect services that millions of users rely on daily.
Industry players are reportedly preparing to approach the Reserve Bank of India (RBI) to request changes and more time before the new rules are implemented.
Why Digital Payment Companies Are Worried
According to industry executives, the RBI’s draft rules released on April 22 could significantly impact wallet-based businesses if implemented without changes.
Officials from digital payment firms say the proposed restrictions are too strict and may disrupt several services built around prepaid wallets and cards.
One company executive said the industry is currently collecting feedback and suggestions and plans to present its concerns to the RBI soon.
The biggest demand from payment companies is an extension of the implementation deadline by at least 6 to 12 months.
They believe businesses need more time to adjust to the proposed changes.
Major Changes Proposed by RBI
The RBI’s draft rules include several new limits for mobile wallets and prepaid payment services.
Some of the key proposals include:
A monthly limit of Rs 25,000 for person-to-person (P2P) transfers through wallets
Reduction in cash deposit limit from Rs 50,000 to Rs 10,000
A total monthly wallet balance cap of Rs 2 lakh
The RBI has also proposed stricter rules for wallets with minimum KYC.
Under the draft guidelines, low-KYC wallets may only be used for purchasing goods and services.
Users may no longer be allowed to send money to another person using such wallets.
Money Transfer Services Could Be Hit Hard
Industry experts say the new rules could severely affect wallet-based money transfer businesses.
Many users currently use wallets with minimum KYC for sending money to family members or transferring funds quickly.
If these wallets are restricted, users may be forced to complete full KYC verification before accessing transfer services.
Officials warn that this could disrupt small-value money transfer services, especially for users in semi-urban and rural areas who depend heavily on mobile wallets.
Industry Wants RBI to Reconsider
The digital payments industry is now hoping the RBI will hold discussions with stakeholders before finalizing the rules.
Companies believe tighter regulations may improve security, but they also argue that overly strict limits could slow down the growth of India’s fast-expanding digital payments ecosystem.
For now, the industry is waiting to see whether the RBI will make any changes after reviewing feedback from payment companies and other stakeholders.