Issues with e-wallets.

Issues with e-wallets.

Customers, who regularly use the services of Uber or shopping sites, find it necessary to use multiple wallets.  This is due to the reason, that some merchants are supported only by a specific application. Things are further complicated, since transfer of money from one wallet to another cannot be done easily -or in other words “INTEROPERABILITY” with all banking platforms, including wallets, offer is not possible.

PAYTM CEO adds that e-wallets offered interoperability, stating that one can take money from Paytm wallet to any bank account and tax to any other wallet which means 100% portable.   Issue though has been escalated to RBI and the Finance Ministry; companies are not allowed to transfer money between wallets.  They can only transfer money to and from bank accounts.

Experts feel permitting interoperability will really help scale up.  RBI has now permitted e-wallets to carry as much as Rs 20,000 and a change in regulation on the interoperability front will boost growth of wallets.  There is another claim that there is no collective interest on various wallets.   In many industries, it is seen that companies come together to form an industry body like iSPIRT, CATMi or CLAI .  Banks with the help of the National Payments Corporation of India (NPCI) have interoperability at all levels. With wallets, there is no collective voice or forum for them to make their representations.

From the Consumer angle, if viewed, there is there are no redressal forums.  For banking frauds or negligence, there is the banking ombudsman, but for e-wallets there is none resulting in security lapse.  This has in turn made SBI to stop supporting Paytm, Mobikwik, FreeCharge, and Oxigen on its platform since last June.  ICICI Bank has said that it has stopped supporting Flipkart’s PhonePe UPI application.  In September, Freecharge informed of about 100 customers losing up to Rs 2.9 lakh while using its services and it has registered a complaint.

The UPI system states that only bank applications can be used by customers. And SBI feels that issues should be taken up with RBI and NPCI, to get non-banks blocked.  ICICI Bank has recently blocked around 20,000 transactions.

  1. ICICI Bank has informed that around 20,000 transactions of PhonePe had failed which amounted to Rs 5 crore. No exact reason for failure is spelt, however, ICICI Bank claims the blockage will stay until the concerns are resolved.
  2. PhonePe is a third-party app but it inked a partnership with Yes Bank to go live on UPI.
  3. Interestingly, Flipkart recently integrated UPI payments on its website and is offering customers cash back on their wallet when they use PhonePe UPI payment.

The concerning issues like detailed certification, vulnerability assessment, penetration testing and third party application security testing are essential, which is insisted by NPCI before going live.

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