- Date : 08/01/2019
- Read: 3 mins
The RBI has issued a guideline that offers much-needed protection to mobile wallet users in the event of unauthorised transactions

The Reserve Bank of India (RBI) has issued an order that limits the liability of consumers in the event of any unauthorised transactions taking place in their mobile wallets.
Prepaid payment instrument (PPI) issuers are now required to provide a contact number and/or email ID in the transaction alert SMS sent to consumers. If consumers notice any unauthorised transactions, they can report it immediately. In case any unauthorised transaction takes place from a consumer’s mobile wallet due to the negligence of the PPI, the liability for the same cannot be placed on the consumer.
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This circular, dated 4th January 2019, makes it compulsory for PPIs to ensure that consumers mandatorily register their email and mobile phones. The transaction alerts sent by the PPIs must mention a phone number and email ID to report unauthorised transactions and provide 24x7 access to website/SMS/email/dedicated toll-free helpline for this purpose. The burden of proving consumer’s liability will rest on the PPI issuers.
It further lays down the liabilities of both the consumers and the PPIs, along with timelines for settlement of liability in case of reporting of unauthorised transactions.
This guideline comes in the wake of the RBI’s fifth bi-monthly monetary policy statement for 2018-19 issued in December 2018, which declared its intention of bringing mobile wallet users to the same level of safety enjoyed by credit and debit card holders.
Related: What makes mobile banking safe?
What is a PPI?
A prepaid payment instrument can be a smart card, magnetic stripe card, internet account, online wallet, mobile account, mobile wallet, paper voucher, or any other instrument that allows access to and usage of the prepaid amount stored therein.
What is a mobile wallet?
A mobile wallet is a virtual wallet that stores the consumer’s money and payment card information on a mobile device. It is a convenient way of making in-store payments and can be used at merchants listed with the mobile wallet service provider. Paytm, Mobikwik, Oxigen, Amazon Pay are some examples of mobile wallet.
Related: How digital payment methods are changing the face of the Indian economy
Why was this guideline issued?
The RBI noticed a shortfall in consumers’ safety when it came to mobile wallets and their unauthorised usage. To bridge this gap and bring consumers’ protection on par with debit and credit card users, the RBI expressed the need for this guideline in its December 2018 bi-monthly monetary statement.
What does the guideline say about the liability of unauthorised transactions?
Where the transaction happens due to the negligence of the customer, they will have to bear the entire loss, until they report the unauthorised nature of the transaction to the PPI issuer. However, if the loss occurs even after the consumer reports the unauthorised transaction, the liability of bearing the loss will shift to the PPI issuer.
Related: UPI: Here's what you must know about this new-age payment mode
What are the timelines for reporting and settlement of unauthorised transactions?
The amount deducted as a result of the unauthorised transaction will be reversed to the consumer’s wallet within 10 days from the date of reporting it.
The PPI issuer will have to settle the complaint and establish the consumer’s liability within 90 days of the complaint. If not resolved after 90 days, the amount shall be paid back to the consumer irrespective of whose negligence resulted in the loss.