Steps to obtain Prepaid Wallet License in India

Being the foundation of digital transaction in India, a prepaid wallets have to be properly supervised in India. Therefore, no one but the holders of prepaid wallet license in India has the authority to provide these wallets to the customers.

In this article, we discuss the steps to obtain prepaid wallet license in India.

Choosing the type of prepaid wallet license

The first task is for the applicant must choose the type of prepaid wallet he wants to provide to the customer. That decision would impact the overall application filing process and the time it takes to obtain the license in India:

1. Closed wallet: A Closed payment wallet is for organizations who only wants the customers to use it within their organizations. Therefore, it’s an organization-based wallet and can only be redeemed from the organization its issued. Think of a voucher, you can only redeem it for buying certain articles from one particular company. Such vouchers come under closed wallets.
2. Semi-closed wallet: A Semi-closed wallet is a type of payment instrument that those sellers use who have affiliations with that wallet. For instance, PhonePe, PayTm, Mobikwik etc.
3. Semi Open wallet: Semi open wallets are payment instruments used by those merchants that accept digital cards for payment.
4. Open wallets: Open wallets are not only for digital transactions, but also to withdraw cash from the banks.
5. Cross border transaction wallets: Cross border transaction wallets have the same restrictions as the above in addition to being only allowed for conducting a specific amount of transactions. Read More: Startup Registration

Considering the eligibility criteria

There are many financial and technical eligibility criteria one has to be meet to be considered eligible for the money wallet license.

1. If the applicant is not a bank of an NBFC (Non Banking Financial Company), he must file have a net worth of at least INR 5 Crore.
2. Furthermore, the applicant must have the human and technical infrastructure to sustain the business of providing prepaid wallet services in India.
3. In case the applicant’s company has a FDI, it must be in accordance with the FEMA authorization in India.

Furnishing the required documents

Once the applicant meets all the eligibility criteria, he must draft a file and populate it with the documents given below:

1. Identity proof of the applicant,
2. Address proof of the registered office,
3. Certificate of incorporation,
4. Articles of Association,
5. Memorandum of Association,
6. Management information,
7. Statutory auditor details,
8. Audited balance sheet,
9. Details of the company’s shareholders,
10. And, name and address of the company’s bankers.

Filing the application and submitting the documents

As of now, RBI hasn’t implemented any online route to submit the online application form for Money Wallet License. Thus, the applicant needs to go to their regional RBI branch and supplied filled application FORM A along with the documents.

Obtaining the In-Principal Approval

Reserve Bank of India starts assessing the application after receiving it. If it finds no issues with your application and the applicant meets the eligibility criteria, RBI issues them an In-Principal Approval. Read More: Producer Company Registration

Submission of Audit Report

After receiving the In-principle approval, the applicant must submit the audit report of their company to the RBI.

Analysis of Audit Report

RBI then conducts a multi-layer analysis of the audit report. After that analysis is complete, and the RBI finds the audit report satisfactory, the applicant obtains the final Prepaid wallet license.

Conclusion

Obtaining a Prepaid wallet license involves a multi-layered approach to application filing. Therefore, the applicant must first consider the type of payment wallet it wants to provide. Only after taking that into consideration and becoming eligible should the applicant take the subsequent steps to obtain Money wallet license in India.

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What are the steps to obtain the Money Wallet License in India? Refer to this blog to know about the procedure to obtain License to operate a payment wallet.