Reportedly, this initiative will make the functioning of digital wallets like Paytm and MobiKwik inter-operable.
RBI is expected to soon issue the guidelines on interoperability and ‘know your customer’ (KYC) norms for digital wallet companies, reported The Economic Times.
The apex bank will also decide on the interchange fees between the wallets for enabling them to access the UPI framework.
According to RBI’s guidelines, Digital wallets can currently access the UPI network through partner banks to facilitate bank-to-bank money transfers.
Provision for direct access of the UPI will mean that a PhonePe or a MobiKwik user will be able to send money directly to a merchant with a Paytm or a FreeCharge digital wallet, expanding the usability of these instruments.
Although the acceptability of digital wallets are high, UPI, which currently allows only transfer of money across banks, is gaining in popularity because of the government’s rigorous campaign as part of its efforts to transform India into a digital economy.
In addition to this, the government is also promoting an Aadhaar-based payment platform and another instrument for transactions using QR codes.