RBI Mandates Safety Valves For Digital Wallets
Digital wallets also known as E-wallets aren’t known to everyone. Digital Wallets have gained their popularity mainly post-demonetization.
Digital wallets also known as E-wallets aren’t known to everyone. Digital Wallets have gained their popularity mainly post-demonetization. Some digital wallets have become are even more widely used than the debit and credit cards mainly owing to the effectiveness and easiness of financial transactions that can be made through digital wallets.
In order to use digital wallets all you need is a smartphone. Once you link your account number and your digital wallet you will not have to bother about carrying cash everywhere. Like every coin has two sides same way like there are advantages of these digital wallets the same way there are certain risks associated with digital wallets. The good news is that the Reserve Bank of India (RBI) has mandated a certain safety measures in order to protect digital wallets of the customers using digital wallets which are enlisted in this article:
- Limited customer liability
The digital wallets being pre-paid in nature are as prone to fraud as the other payment methods. The new guidelines define the liability of the customers and that of the prepaid instrument player when it comes to unauthorized transaction. RBI has made it clear that the customer will not be held responsible for transactions that occur due to negligence, deficiency or connivance of the company.
These guidelines are also applicable to cases where the unauthorized transaction was caused due to third party breach where neither the issuer nor you are at fault. This kind of default must be reported within three days of occurrence. In case of your failure to report within a period of three days, you can still report the matter within seven days, however in that case your liability will be limited to Rs. 10,000/-. On the other hand if you take even longer time to report such incident then you may end up paying for the dubious transaction unless the issuer offers to entertain you can take up the loss.
- Burden of proof lies with the issuer
The major concern for the customers is the fact that they have to pay dubious transaction without compensation. However, as per RBI’s new safety norm, in case of unauthorized transaction the issuer will bear the burden of proving the customer’s liability.
- Time-bound transaction reversals
In cases where you have brought an flawed transaction to notice of the issuer within the given time-frame, in such cases the issuer will have to credit the lost amount back in the customers wallet within 10 days of receiving the complaint. The process of investigating and compensating the customer’s request must be resolved within 90days of the receipt of complaint. In case where the issuer fails to adhere the timelines given by RBI they are liable to pay the compensation to the customers even if the loss was cause on account of the customer’s negligence.
- Mandatory registration for alerts on transactions
In order to make this entire process more efficient, RBI has mandated that the customers must register for SMS alerts and be aware of all the transactions happening in their wallet. The customers will be sent real-time SMS alerts for every e-wallet transaction.
- Options to report unauthorized transactions
RBI has also directed the prepaid instrument (PPI) issuers to create awareness amongst the customers encouraging them to report all the suspicious transactions. In order to support the awareness the issuers have been instructed to ensure 24/7 service access through a dedicated toll-free number, website, SMS, and email to facilitate proper report of any such event.
PPI issuers have an obligation to provide a direct link on their website or application to register complaints. They will also send an immediate auto response and acknowledge the complaint while providing the customers a reference number of the complaint made.