Question

Which of the following is not a valid mean of authentication for interoperable transaction.

Answer 1

Answer:

The Reserve Bank of India has finally issued guidelines for interoperability of wallets, one year, eight months and seven days after the deadline of February 9th 2017 set by the Watal Committee for this task lapsed.

The guidelines aren’t wallet friendly either: when they first launched, wallets were meant to be an alternative to banks, essentially, stores of small amounts of money required for small transactions. With these guidelines, wallets are now required to use UPI (Unified Payments Interface) for interoperability, and required to work with a sponsor bank for settlement.

Remember that independent payments services were also largely rendered defunct when the RBI came out with a bank-friendly policy for mobile banking.

The guidelines for interoperability

The central bank is looking at enabling three key phases and has set out guidelines for these: interoperability between wallets through UPI, between wallets and bank accounts through UPI and for PPI cards via card networks.

1. Compliance for PPI cards and wallets:

Which users can transfer money? Interoperability will only be facilitated for KYC compliant accounts. Since Aadhaar authentication is no longer valid for private parties, PPIs will have to undertake other forms of KYC.

How will the transfer be enabled? This will be enabled through UPI if the PPI is a digital wallet. In case of cards, including meal and gift voucher cards, it will be via the authorised card networks, which means that the cards may have to connect to the existing card networks.

What will wallet companies have to do? Comply with requirements of UPI and card networks (membership type and criteria, merchant on-boarding, technical requirements, certifications, audit requirements etc.).

How will reconciliation happen? Based on requirements prescribed by card networks/UPI, whether daily, weekly, monthly or more frequently.

What about grievance redressal? As per mechanisms prescribed by card networks/UPI.