wallet

The Reserve Bank of India (RBI) has given Eko India Financial Services, Card Pro Solutions and Paul Fincap Private Limited prepaid payments instruments licenses to operate a wallet in the country. The RBI website shows that Eko Financial Services got its license in March 2015 and is valid up to March 2020. Card Pro Solutions and Paul Fincap’s licenses are valid  up to June 2020 and were issued in June 2015.

It’s worth noting that earlier in the year, mobile VAS and Internet products company Spice Digital received a semi-closed pre-paid payments wallet license from the RBI.  The company was given the license in April and is valid till up to June 30, 2020.

Gurgaon-based Eko India is a financial services company which acts as banking correspondents for State Bank of India, ICICI Bank and YES Bank. The company  provides no-frills bank accounts and deposit, withdrawal and remittance services to customers through mobile banking and its Eko Counters.

Mumbai-based Card Pro Solutions is a smart card manufacturer and provides card based automation services for idustires such as telecom, health care, agriculture, automobile, clubs and gymkhanas, airlines among others.

Chandigarh-based Paul Fincap Private Limited is a financial services company which offers money transfer, forex, travel & insurance and allied financial products. The company also provides gold loans.

Aircel gets a PPI license: Telecom operator Aircel through its subsidiary, Aircel Smart Money Limited, secured  five-year prepaid mobile wallet license from the RBI enabling them to provide mobile wallet services to its subscribers, as reported by the Economic Times.

Aircel is the sixth operator to receive the wallet license after Bharti Airtel, Vodafone India, Reliance Jio, Idea Cellular and Tata DOCOMO.

Airtel Money had reported an active base of 1.7 million users in India in Q4-FY14, up from 1.3 million in the previous quarter. The total number of transactions made in the country was at 38 million, up 25.8% quarter-on-quarter (QoQ) while the total amount transacted was at Rs 1,364.2 crore for the quarter, up 10.2% QoQ. Vodafone’s m-pesa service had reported 501,000 active users active users as of June this year.

Reliance Jio is yet to commence its operations for its wallet service and Tata DOCOMO does not disclose its wallet service’s numbers.

Nachiket Mor committee recommendations and payments banks

It’s worth remembering that the Nachiket Mor committee in its report had recommended ending the prepaid payments instrument (PPI) license and that companies should instead apply for a payments bank license instead.

Given the difficulties being faced by PPIs and the underlying prudential concerns associated with this model, the existing and new PPI applicants should instead be required to apply for a Payments Bank licence or become Business Correspondents. No additional PPI licences should be granted.

However, The RBI in its final guidelines for payments banks said that companies with existing PPI licenses could opt to convert to a payments bank license and that it was not mandatory for an existing PPI issuer to apply for the same and it may continue as a PPI issuer.

Existing PPI players who have applied for a payments bank license include Paytm,Vodafone India, Idea Cellular, Bharti Airtel, MobiKwik, Itz Cash and Reliance Industries. So far, the RBI has received 41 applications for payments banks.