Fintech Players Stop Customers' Transactions After RBI Order

Prepaid payment instruments (PPIs) are learnt to have stopped customers' transactions on their prepaid cards in reaction to Reserve Bank of India's (RBI) notification.

In reaction to the recent RBI guidelines that disallowed non-bank PPIs from loading credit, startups including Jupiter, EarlySalary and KreditBee have reportedly halted customers' transactions on their prepaid cards, according to media reports.

As per media reports,fintech firms have temporarily stopped their prepaid credit line offering to avoid attracting RBI penalty on partners firms.

There are chances that some partner banks of these card-based fintech firms may also stop supporting their bank PPIs to these platforms after seeking clarification from the RBI.

It is to be noted that banking PPIs include players such as HDFC Flexipay, ICICI PayLater, HDFC Payzapp, SBI YONO, and ICICI Pockets, among others. On the other hand, non-bank PPIs are independent online wallets – Paytm, PhonePe, Google Pay, MobiKwik, Oxigen, Ola Money, and Amazon Pay among others.

Earlier there were reports that fintech players are thinking of approaching RBI over its notification for non-bank PPI issuers. They aim to seek greater clarification from the central bank regarding the notification issued recently by it.

The RBI has issued a notification to non-bank fintech players saying that prepaid payment instruments (PPIs) cannot be loaded with credit lines.

“The PPI-MD (PPI-master direction) does not permit loading of PPIs from credit lines. Such practice, if followed, should be stopped immediately. Any non-compliance in this regard may attract penal action under provisions contained in the Payment and Settlement Systems Act, 2007,” the notification by the central bank addressed to non-bank PPI issuers said.