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RBI Mandates Safety Valves For Digital Wallets

The Reserve Bank Of India (RBI) has come up with safety mandates in favour of customers. Let’s take a look at the 5 guidelines issued by the Central Bank.

E-wallets or digital wallets aren’t alien to us anymore. Post demonetization, they have come to become even more popular than other modes of payments such as your Debit Card or Credit Card. Given how versatile they are in nature, e-wallets are hands down an effective and easy way to conduct financial transactions.

Additional Reading: How To Use Digital Wallets Effectively For Online Transactions

All you need is a smartphone and once you link your e-wallet to your bank account you don’t have to bother about carrying cash. That said, digital wallets are also prone to a certain amount of risk, considering how user-friendly they are. The risk of misuse, fraud and other errors are quite high.

But the good news is that the Reserve Bank Of India (RBI) has mandated a bunch of safety measures to protect digital wallet customers. Let’s take a look, shall we?

Additional Reading: All About Digital Wallets

  1. Limited customer liability

Since e-wallets are prepaid payment instruments, they are prone to fraud as much as any other form of payment method. So, the new guidelines define the liability of the customer and that of the prepaid instrument player when it comes to unauthorized transactions. As a customer, you will not be held liable for transactions that occur due to the company’s negligence, deficiency or connivance.

This guideline is also applicable to instances where the unauthorized transaction was due to a third-party breach when neither you nor the issuer was at fault. However, this needs to be reported to the company within three days.

That said, if you fail to report the incident within three days but manage to do so within seven days then, your liability will be limited to only Rs. 10,000. And if you take longer than this to report the incident, you will have to pay for the dubious transaction unless the issuer offers to take up the loss.

  1. Burden of proof lies with the issuer

The biggest concern for most customers is the fact that they have to pay up for the dubious transaction without any compensation. But with RBI’s new safety valve, in case of unauthorized transactions, the issuer will bear the burden of proving a customer’s liability.

  1. Time-bound transaction reversals

If you have brought any erroneous transaction to the notice of the issuer within the stipulated time frame, then the issuer will have to credit the lost amount back to your wallet within 10 days. The entire process of investigating and compensating the customer needs to be resolved within 90 days of receipt of the complaint.

In case the issuer fails to adhere to these timelines, then they are liable to pay compensation to the customer even if the loss was caused due to the customer’s negligence.

Additional Reading: Learning To Use Your E-Wallets Safely

  1. Mandatory registration for alerts on transactions

To make this process efficient and foolproof, the RBI has mandated that customers need to register for SMS alerts in order to stay on top of their transactions. Real-time SMS alerts will be sent to customers for their e-wallet transactions. Thus, customers will also have to update their contact details to get these alerts.

  1. Options to report unauthorized transactions

Additionally, the RBI has also instructed prepaid instrument (PPI) issuers to create awareness amongst their customers regarding reporting of suspicious transactions. In order to support such awareness, issuers have been directed to ensure 24/7 customer service access through dedicated toll-free helpline numbers, websites, SMSes, and emails to report iffy transactions or any similar loss.

Moreover, the PPI issuers have an obligation to provide a direct link on their app or website to register complaints. They will also have to send a prompt auto response to acknowledge the complaint while providing the customer with a reference number.

Did you know you can buy Mutual Funds via digital wallets? See for yourself.

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