The industry is divided on the implications of a new rule on prepaid cards and wallets, but it looks like most pay later business models no longer work.
A clarification on the prepaid payment instrument rules issued by the central bank to digital wallet companies late on Monday night has sent India’s fledgling but well-funded buy now pay later sector into a spiral and for all the right reasons.
From the circular (not yet uploaded on the RBI website): “The [Prepaid Payment Instruments - Master Directions] 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.”
According to four industry executives, …
Ashwin writes on fintech and banking at The Morning Context. He joins us from The Economic Times, he worked across the finance, tech and startup verticals, breaking stories related to India’s banking system, startups in the new economy, digital payments, insurance and cryptocurrencies.
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ashwin@mailtmc.com
Delhi