Herald: The Invisible Wallet – (Part II)

The Invisible Wallet – (Part II)

01 Apr 2019 04:09am IST
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01 Apr 2019 04:09am IST

In my previous article, I had written about the emergence of e-wallets and how they are different from the traditional channels of receipts and payments such as banking, credit cards etc. But as with everything that’s revolutionary there are inherent risks that come with it. In today’s article, I will highlight measures taken by RBI to counter any such risks so that e-wallets are safer for its users.

Fixation of Liability

The guidelines define liabilities of customers and prepaid instrument (PPI) players when it comes to unauthorised transactions. In case the transaction takes place due to the company’s negligence, deficiency or connivance, you will not incur any liability. This will also be the case if you report the unauthorised transactiona third-party breach where neither the customer nor the issuer is at faultto the company within three days. If you take longer but approach the issuer within seven days, your liability will be limited to Rs. 10,000. Beyond this period, however, you might have to pay for the delay in reporting the dubious transaction, unless the PPI issuer decides to take a lenient view. 

The central bank has sought to safeguard customers even if the fraud can be traced to their negligence, provided they act in time. If a loss occurs before the iffy transaction is reported, the customer will bear the loss. If it occurs after the transaction is brought to the PPI issuer’s notice, it will be borne by the latter. 

Onus of Proof

A key concern amongst users of e-wallets and other prepaid instruments is the prospect of losing money to fraudulent transactions, without any recourse to compensation. With the RBI clearly shifting the burden of proving customer liability in case of unauthorised electronic payment transactions to prepaid instrument issuers, customers can now heave a sigh of relief. The banking regulator had, in 2017, already established this rule for banking entities. 

Giving back money

Once you bring any suspicious transaction to the issuer’s notice, it must credit the lost amount back to your wallet or any other PPI within 10 days. The companies will also have to resolve the complaint and establish your liability as per their boardapproved policy timelines. However, the process should be completed within 90 days of receipt of complaint. Should the PPI players fail to adhere to these deadlines, they will have to pay the prescribed compensation, even if the loss was caused by the customer’s negligence. 

Transaction alerts mandatory

The RBI has also directed prepaid players to get customers to register for SMS alerts mandatorily, so that they can be updated real-time about electronic payment transactions. “The transaction alert should have a contact number and/or e-mail ID on which a customer can report unauthorised transactions or notify the objection,” the RBI notification states. PPI issuers will also have to send e-mail alerts where the IDs are available. For consumers to benefit from the latest guidelines and stay protected against frauds, it would make sense for them to register for SMS alerts with correct contact details. 

Prompt reporting

The RBI has directed PPI issuers to educate customers about the importance of notifying unauthorised transactions at the earliest. “Longer the time taken to notify the PPI issuer, higher will be the risk of loss to the PPI issuer/customer,” the notification says. The companies will have to ensure round-the-clock access through dedicated toll-free helplines, websites, SMSes, and emails for reporting of unauthorised transactions or loss of prepaid instrument. They are now duty-bound to provide a direct link on their apps or websites for registering complaints. They will also have to send a prompt auto response acknowledging the complaint along with the complaint number. 

To sum up, while the RBI notification places the bulk of the responsibility for ensuring glitch-free transaction, rectification and grievance redressal on the PPI issuers, this does not absolve customers of all responsibility. Do not ignore alerts. Inform the company as soon as possible. There is no need to wait for up to three days, when you can report the dubious transaction immediately. As with everything that’s new there is an element of learning involved before benefitting from it. Although e-wallets show promise of ease of transaction along with safety from theft associated with usual cash transactions, one must exercise prudence while exercising this medium so that we can move towards a more transparent and secure cash free economy.

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