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With Rs 500 and Rs 1000 notes being phased out by the government, there is still no clarity from the Reserve Bank of India (RBI) regarding cash loading with these denominations in digital wallets and wallets which offer remittance service. MediaNama contacted Paytm, MobiKwik, Oxigen, FINO Paytech and ItzCash and they said that they are still awaiting instructions from the RBI about cash pickups and money transfer service.
Typically, low-income daily wage workers use the money transfer service to send money back to their families. The phasing out Rs 500 and Rs 1000 notes will hit these workers more as may of them do not have a bank account and where the money can be credited into. They will probably have to wait for the right denominations to be given so that they can send money.
With offline wallets such as Oxigen, consumers can deposit cash with one of its agents at a retail location, and it gets deposited into a wallet. The company had mentioned that the average ticket size of a money transfer was Rs 3,500 and has more than 50 million transactions a month in its retail outlets.
The amount of money deposited in these services is not a small amount. MoneyOnMobile processed $224 million in the June quarter through its 319,292 retail stores and serving 182 million mobile users.
Although, most wallet with a prepaid payment instrument (PPI) licence have been urging customers to load money on their wallets through cards and net banking. In fact, Freecharge reported a sharp 12X overnight jump in the average wallet balance as consumers loaded up their wallets to face a cashless day across the country.
The RBI need to issue a statement which will clear up whether wallets can accept the currency. Ideally, it should allow people to load cash with any denominations into wallets since one of the aims of the demonetization drive is to drive adoption of digital payment methods. Considering that wallets have a PPI licence, the RBI can still keep track of cash being deposited into these PPIs.