In a move that could help to give a huge boost in the use of digital payments in our country, the Reserve Bank of India on Tuesday laid out guidelines that would allow for seamless payments to be done between various mobile wallets.

Mobile wallets have experienced a steady growth like Paytm backed by SoftBank and Alibaba, which has become popular in India after a ban on high-value currency in late 2016 pushed people to pay digitally. Mobile wallets as of now does not have the feature to allow users to send or receive money from a wallet run by another firm.

The Reserve Bank of India said on Tuesday that Digital wallet companies, if they want it, can utilize state-backed payments network UPI that allows peer-to-peer payments instant, to make wallets inter-operable.

“It’s going to increase the growth rate of digital payments in India even faster and, of course, create more business opportunities,” said Upasna Taku, co-Founder of fintech firm MobiKwik, which operates a wallet.

According to Credit Suisse, Digital payments in India are projected to grow five-fold to almost USD 1 trillion by the year 2023.

According to the data provided by RBI, UPI-enabled transactions were reported to have crossed 151.7 Mn mark last month, which was after undergoing a 4% increase from the 145.5 Mn transactions clocked in December 2017.

In a similar way, the total value of transactions Digital wallet companiesalso increased by 18% from USD2 Bn (INR 131.4 Bn) in the 2017 to USD 2.4 Bn (INR 155.4 Bn) in January. Out of this, the Bharat Interface for Money (BHIM) app accounted for more than 9.57 Mn transactions worth upwards of about USD 57 Mn (INR 3.65 Bn).

In the last months or so, UPI-based transactions have increased to a massive 7000%, as it was stated by RBI. For instance, UPI recorded just around 2 Mn transactions in December 2016, just a month after demonetization was instituted.

The United Payments Interface was launched in August 2016 by the RBI in collaboration with the National Payments Corporation of India (NPCI) and was basically designed to deliver service of peer-to-peer transactions. After its launch, it was announced that UPI was adopted by at least 29 banks. As of now, there are 71 banks that allow transactions via UPI.

UPI is said to be one-touch transaction to enable transaction of money between any two people by using a ‘unique virtual address’ available on a smartphone. The payments made through UPI follow the IMPS (Immediate Payment Service) structure to proceed for the transactions.

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