We blogged about how ecommerce is going to be badly hit by the impending RBI guidelines for credit/debit card transactions online from 1st of August onwards. This guideline though a nightmare for ecommerce and credit / debit card companies in general also opens up a unique opportunity for the Ewallet services in India. If one may remember the Timesgroup had launched such a service with much fanfare in 2006. It was called wallet365 and they had roped in Amitabh Bachchan to launch the service then. RBI had objected to the service as it was the first of its kind in India and flouted several norms that time. Wallet365 by all means was the first attempt at creating a paypal like platform in India which never took off purely because of RBI objection.
Offlate RBI has been more forthcoming in setting rules and regulations for the launch of such services. Early this year they put up draft guidelines concerning Ewallets on their website. Also from what we hear from Industry sources is that the RBI is soon to announce final regulations which would allow the functioning of such E-Wallets.
In Light Of Credit Card Regulations – E-Wallets The Only Hope For Ecommerce?
We here at WATBlog believe that the convenience that E-wallets offer would ease the pain that the recent credit card verification norms would cause. We also believe that this is the most opportunitic moment for players like Wallet365 to relaunch themselves in the near future and position themselves as the most hassle free way to transact online.
Concerns for E-wallets?
The concern for ewallets primarily would be the restrictions that RBI imposes upon them in the final guidelines for the service. Technically mobile payment players like Paymate have been running a mwallet service via products like giftmate which allow users to gift or buy goods and not really transfer money via mobile. Currently the limit per transaction that seem to be provided by RBI in the draft guidelines is that of Rs.5000 this again is for closed prepaid instruments while E-wallets like wallet365 would probably fall in open prepaid instuments (if they allow cash transfer via ewallets) on which there is not much information. Read RBI’s draft guidelines here.
Why India desperately needs a Paypal like system?
Well ecommerce has been the pain point in India’s digital ecosystem and the reasons are many including low penetration of credit cards as pointed out by Rediff’s Ajit Balakrishnan. Also the further regulation on credit cards by RBI wont help the cause of ecommerce. Its important that ecommerce gets a push in India so that advertisers and SME’s both can starting taking the medium seriously. Same goes for mcommerce. Though we shall discuss on why mcommerce might be less affected by the RBI norms for credit card in our next post.
