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What is RBI Payment Wallet License<\/strong><\/span> RBI has classified prepaid payment wallet into three categories:<\/strong><\/span><\/p>\n \u2022 Closed system payment<\/span> Type of Payments Wallets in India<\/strong><\/span> [\/vc_column_text][vc_column_text]<\/p>\n Open system payment<\/strong><\/span> Semi-Closed system payment:<\/strong><\/span> You can use a Semi-Closed system payment wallet:<\/strong><\/span> [\/vc_column_text][vc_column_text]<\/p>\n Brief Procedure for Incorporation of Prepaid Wallet Business<\/strong><\/span><\/p>\n STEP-1: Setup a Company under Company act, 2013 by applying to Registrar of Company.<\/span><\/p>\n STEP-2: Filling of Application for approval in Form A as given under Regulation 3(2) of the Payment and Settlement System Regulations, 2008. With fee to Reserve Bank of India for grant of License.<\/span> STEP-3: Screening process shall be initiated by RBI to ensure prima facie eligibility of the applicants.<\/span><\/p>\n STEP-4: Subject to fulfilling the eligibility criteria and other circumstances, the Reserve Bank of India issues an \u2018in-principle\u2019 approval. The validity of in-principle approval issued by RBI shall be six months from the date of granting such in-principle approval.<\/span><\/p>\n STEP-5: Company shall submit a satisfactory System Audit Report to RBI within these six months, in case of failing which the in-principle approval shall lapse automatically. The entity can take one-time extension of six months by making an appeal in writing in advance with valid reasons.<\/span><\/p>\n STEP-6: After consideration of all the particulars furnished by entities granted final approval shall commence business within six months from the grant of Certificate of Authorization<\/span><\/p>\n [\/vc_column_text][vc_column_text]<\/p>\n Eligibility Criteria For Payment Gateway Wallet License: \u2022 Only banks which have been permitted to provide Mobile Banking Transactions by the Reserve Bank of India shall be permitted to launch mobile based prepaid payment instruments (mobile wallets & mobile accounts).<\/span> Capital Requirements<\/strong><\/span> Semi-Closed PPIs Authorization Process<\/strong><\/span> [\/vc_column_text][\/vc_column][vc_column width=”1\/4″ css=”.vc_custom_1619934357491{border-radius: 2px !important;}”][vc_empty_space][vc_custom_heading text=”Request A Call Back” font_container=”tag:h3|text_align:center|color:%23cca876″ use_theme_fonts=”yes”] <\/p>
\nMobile payment generally refers to payment services operated under financial regulation and performed from or via a mobile. Mobile payment wallet also referred to as mobile money, mobile money transfer and mobile wallet.Payment wallet license or prepaid payment wallet license in India is issued by RBI. RBI is responsible for issuing guidelines and rule for prepaid payment wallet and responsible for granting the license.<\/span><\/p>\n
\n\u2022 Semi-closed system payment<\/span>
\n\u2022 Open system payment<\/span><\/p>\n
\nClosed system payment:<\/strong><\/span>
\nClosed wallet is the wallet which is issued by a company to a consumer for buying goods and services exclusively from that company. Example: Amazon, Cleartrip, etc. Such instruments do not allow cash withdrawal or redemption,<\/span>
\nRestrictions of Close System Payment Wallet:<\/span>
\n\u2022 The close wallet does not permit cash withdrawal or redemption.<\/span>
\n\u2022 In case money is stored in the close wallet, it can only be used to purchase from the particular Site.<\/span><\/p>\n
\nThis is a type of wallet which can be used to purchase goods and services and also permit cash withdrawal at ATM. Example- Visa card, Master Card, Rupay card.<\/span>
\nYou can use the Open system payment wallet:<\/span>
\n\u2022 For cash withdrawal at ATM<\/span>
\n\u2022 Payment on purchase of goods and services on swiping<\/span>
\n\u2022 Use through POs machine for making payment.<\/span><\/p>\n
\nIt is a wallet that can be used to buy goods and services as it is a payment instrument that is redeemable of clearly identified merchant that contract specifically with the issuer to accept the payment instrument. Example- Paytm, Mobikwik, Freechare, etc.<\/span><\/p>\n
\n\u2022 Pay to the affiliated merchant for purchasing goods<\/span>
\n\u2022 Purchase from wallet issuer<\/span>
\n\u2022 Transfer money<\/span><\/p>\n
\n\u2022 Composition of the applicant.<\/span>
\n\u2022 Proof of position of registered office.<\/span>
\n\u2022 Certificate of Incorporation (COI).<\/span>
\n\u2022 A detailed report of principle business of the company.<\/span>
\n\u2022 Management detailed information.<\/span>
\n\u2022 Statutory auditor of the Company.<\/span>
\n\u2022 Recent audited balance sheet.<\/span>
\n\u2022 Name and address of bankers of Company.<\/span>
\n\u2022 Details of payment system with process flow, technology to be used, security features, inter-operability, etc.<\/span>
\n\u2022 Expected benefits to Indian the financial systems.<\/span>
\n\u2022 Amount of own capital proposed.<\/span>
\n\u2022 Sources of funds.<\/span>
\n\u2022 Any other information as may be required by RBI.<\/span><\/p>\n
\nEligibility Criteria<\/strong><\/span>
\nBanks and Non-Bank Finance Companies(NBFC), who comply with the eligibility criteria, would be permitted issue all categories of payment instruments.<\/span><\/p>\n
\n\u2022 Other entities would be permitted to issue only closed system prepaid payment instruments and semi-closed system prepaid payment instruments.<\/span>
\n\u2022 Mobile Prepaid value: Mobile Service Providers are permitted to issue mobile prepaid value. In addition to talk-value, the use of such prepaid value as a payment instrument shall be restricted to the purchase of only such value added digital contents\/services which are for use on mobile phones. The use of mobile prepaid value for the purchase of other goods and services shall not be permitted.<\/span><\/p>\n
\n\u2022 Only banks and Non-Bank Finance Companies complying with the Capital Adequacy requirement prescribed by Reserve Bank of India from time-to-time shall be permitted to issue prepaid payment instruments.<\/span>
\n\u2022 A company incorporated in India and registered under the Companies Act 1956 \/ Companies Act 2013, with the principal objective of the financial business.<\/span>
\n\u2022 Any financial entities looking for payment wallet authorization from RBI must have a minimum positive net-worth of ? 5 cr.<\/span>
\n\u2022 Foreign Exchange Prepaid Payment Instruments: Entities authorized under FEMA to issue foreign exchange prepaid payment instruments are exempt from the purview of these guidelines. The use of such payment instruments shall be limited to permissible current account transactions and subject to the prescribed limits under the Foreign Exchange Management (Current Account Transactions) Rules, 2000, as amended from time to time.<\/span><\/p>\n
\n\u2022 Any company with the principle objective of finance trade eager of setting up payment wallet systems will apply for RBI Form A as suggested under Regulation 3(2) of the Payment and Settlement Systems Regulations, 2008 along with a minimal fee of INR 10000\/-.<\/span>
\n\u2022 RBI will review the application as per the guidelines of the Payment and Settlement Systems Regulations, 2008, also check the background of the management by obtaining inputs from other regulators, government departments, etc. If Applications is not as per prescribed in the guideline\u2019s, It shall be returned without refund of the application fees.<\/span>
\n\u2022 The certificate will be valid for 5 years. After five years apply in writing to DPSS, RBI, Central Office, and Mumbai office should be initiated at least three months before the expiry of the validity of Certificate of Authorization,<\/span><\/p>\n<\/ul><\/div>\n