The Reserve Bank of India (RBI) tightened guidelines for mobile wallet providers and outlined strict new financial barriers for market entry in a bid to crack-down on fraud and improve services for consumers.

New regulations mean mobile wallet providers must collect more thorough data and perform detailed checks on the majority of customers. The updated rules will be rolled out over the next 12 months and broadly bring wallet providers into line with banks, which already collect and verify detailed personal data to open accounts.

Previously, service providers could open accounts using more basic data such as a name and phone number.

Customers with a balance higher than INR10,000 ($154) will now need to submit full identification details and have these verified by their provider, while those with funds below this level will only be able to use their wallets for retail payments and be subject to an annual deposit limit.

The RBI also specified new (non-bank) companies entering the sector must now be able to prove net worth of INR50 million at the time of application, and hit INR150 million within three years – a level the company is obliged to maintain to remain in operation.

In a statement, the RBI said the laws will: “foster competition and encourage innovation in this segment in a prudent manner while taking into account safety and security of transactions as well as systems along with customer protection and convenience.”

The RBI also put a timeline on complete interoperability between mobile wallet providers using the Unified Payments Interface (UPI).

All companies using the protocols – which were designed to allow easy transfer of funds between banks and wallet providers – have until 11 April 2018 to enable full interoperability.

Most of the high-profile recent wallet launches are based on the UPI standard, including Google’s Tez released in September and popular social network Hike, which launched a payment service in June.