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RBI to make e-wallets safer for digital payments

today Dec 6, 2018
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The Reserve Bank of India (RBI) will introduce limited liability for prepaid services including digital wallets and is creating an office especially for digital transaction complaints to promote digital spending and e-commerce.

The RBI is working to build trust in and monitor prepaid instruments such as digital wallets - Instagram: @westfieldcenturycity

“RBI’s endeavours to promote a less-cash society has resulted in a significant rise in the volume, value and channels for conducting digital transactions,” RBI deputy governor M K Jain told TNN. “For promoting the level of trust, a dedicated and empowered grievance redressal system is a pre-requisite… It will cover all entities falling within RBI’s jurisdiction, which means non-banks as well.”

The ombudsman for digital payments will be cost-free to use and will be funded by the RBI. A similar grievance redressal system already exists for card payments and the RBI introduced “zero liability” for card users reporting fraud last year as long as they had not divulged personal information and reported the fraud in time. The RBI offers “limited liability” on card fraud cases where the complainant has some liability such as not reporting the incident swiftly.

On December 5, the RBI announced that it would apply its “limited liability” concept to prepaid instruments (including digital wallets) but, given the lower transaction values and balance on prepaid instruments, it is expected that the liability will also be lower.

The creation of an ombudsman solely for prepaid instruments has the aim of increasing consumer trust in this payment method. Along with contributing to the digitisation of payments, it also serves to promote e-commerce in India. A major reason why some consumers are still reticent to shop online is fear of fraud and so the RBI is working to build consumer trust in this sphere.

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