In view of the recent Government initiatives, more people opt for digital transactions in our country, for transfer of funds, and other operations, however, the same is still causing issues at various levels. Recently it was reported that ICICI Bank is blocking transactions through PhonePe, which is an app developed on UNITED PAYMENT INTERFACE (UPI). What is the hitch?
- PhonePe was compelling the customers to generate a new UPI handles on its platform which was in violation to the interoperability guidelines.
- This in turn is countered by PhonePe, stating that all the users who are registered with it have the option to save their preferred UPI virtual payment address which if done the issue would not come up.
- A similar situation had arisen with SBI few months ago who had blocked transfer of funds from SBI accounts ot mobile wallets through net banking.
The National Payments Corporation of India’s MD and CEO says that these are temporary issues which would be resolved soon adding that there is already
facility available through PoS (Point of Sales) or NEFT/RTGS through which amounts can be transferred from bank to Bank. RBI recently has also announced in a meeting with the Public Accounts Committee, that a single electronic platform is being formulated, which would be the gateway for making smooth cashless transactions at a low cost. A complete interoperability system is required for such a seamless transfer of funds from bank to bank, and till a solution is brought out, customers, will have to cautiously select as to which is the most suitable payment system that they can opt for, depending upon the amount and other issues. AT present, transfer of funds from one mobile wallet to another is not possible.
One more important notable aspect is that for a wallet operation, the KYC compliance is minimal, whereas a Banking operation requires full KYC compliance. If full-fledged inter-operability is to be brought in RBI would step in to insist for a full KYC compliance system.