PayUmoney wallet is shutting down at the end of January 31, 2018 and is asking users to transfer the wallet amounts back into their bank accounts. When users open the PauUmoney app, it redirects users to the website where it gives further instructions on how to send unspent wallet balances. Currently, the wallet does not allow any addition of money as well.
However, the company says it will be launching a new product instead and users will be able to use saved cards on all websites and apps. Note that Jitendra Gupta, managing director of PayU, had told MediaNama that the Citrus Pay wallet licence would be surrendered following PayU’s $130 million acquisition of Citrus Pay.
In August 2016, PayU got a semi-closed prepaid wallet licence from the Reserve Bank of India (RBI). However, PayUmoney had got the requisite wallet licence from RBL Bank before. At the time of publishing, PayUmoney still said that it was being powered by RBL Bank. MediaNama has reached out to Gupta for a comment and will update when we hear from him.
At the time of the Citrus Pay acquisition, Gupta said that PayU had a combined wallet user base of around 30 million.
New wallet guidelines
The development comes in the backdrop of the onerous new wallet guidelines from the RBI. The RBI mandated higher net worth requirements, increased KYC and linking to Aadhaar, reduction in the amount of money a wallet can hold. However, the RBI did dangle interoperability wallet companies but was conditional that they have full KYC.
Semi-closed wallets were introduced as an alternative to bank accounts as it did not involve extensive KYC and needed only a phone number, email address, name, and date of birth at the time of registration. But with the new guidelines, the RBI has mandated that all wallets should have the same KYC as bank accounts.
Shutting down a wallet service
Note that in May 2016, the RBI issued guidelines to digital wallet companies who wish to surrender their licences. The RBI mandated wallet companies need to send notices to customers which indicate that customers can spend the amount in wallets or opt for a refund to their bank accounts within a time period.
Note that companies have to issue a public notice in English, Hindi and a vernacular language in the print or visual media stating to its customers and merchants its intent to close down operations.
The notice should also indicate that customers can spend the amount in wallets or opt for a refund to their bank accounts within a time period. It should also contain information of the nodal officer and the mode of receipt of such requests for redemption.