With the introduction of restrictions, customers will no longer be able to add money to their wallets using credit cards. The order is a major setback for Fintech companies, which offer a number of services, including keeping money in their wallets. Some fintech companies also offer loans through such services. This is possible through collaboration with banks.
Slice, UNI, FI, and Payu’s LaceyPay all offer such services. Banks like SBM Bank of India and RBL Bank also issue such cards. In some cases, the card is issued by the bank, but the credit limit is set by Fintech’s NBFC partner.
The extent to which this decision will affect the region will be clear only if the Reserve Bank issues a detailed notification and clarification. In a recent interview, RBI Governor Shaktikant Das said that the RBI would take steps to regulate digital payment spaces and enable secure transactions for customers. In its recently announced monetary policy, the RBI has also announced that it will strengthen the country’s digital economy.
The RBI has clarified what prepaid payments instruments are. These are generally defined as facilitating the purchase of goods and services. This includes fund transfers, financial services, and remittances.
Wallet payments, smart cards, mobile wallets, magnetic chips and vouchers are all different forms of prepaid payments instruments. Banks and non-banking financial institutions are permitted to issue these.