What is Prepaid Payment Instrument PPI in India? www.deekpay.com

In accordance with the guidelines set out in the Payment and Settlement Act 2005.Reserve Bank of IndiaDefine prepaid payment instrument (PPI) as a payment tool used to facilitate the purchase of goods and services, including funds transfers, financial services and remittances, to cover the value stored in or on the instrument.

The value stored in an instrument represents the value that has been paid by the holder or the instrument by any means, such as cash, bank account debit, credit card or even other PPI.PPI can be in the form of payment wallets, smart cards, magnetic chips, vouchers, mobile wallets and so on. Any instrument that can be used to access prepaid amounts is a PPI.

What is PPI?

Prepaid payment instruments (PPIs) are payment instruments used for the purchase of goods and services, including transferring money, conducting financial transactions and remittances, utilising stored value in or on the instrument.

Recommended Reading:What is India Payment Wallet Licence?

Types of Prepaid Payment Instruments PPI in India

According to the Reserve Bank of India, PPI in India can be issued under three systems.

1. Closed system: A closed system is one in which the PPI issued is valid only when it is used to purchase from the entity that originally issued it. When a person attempts to purchase goods or services from another supplier, the use of such PPI is invalidated. The system also does not allow cash withdrawals from the amount stored in the PPI. Since the Reserve Bank of India does not classify this PPI system as a payment system, prior approval of the Reserve Bank of India is not required for issuing such PPIs. Examples of closed system PPIs are paper vouchers or gift vouchers and coupons; it also includes smart cards that can only be used at the organisations that issue them, such as metro cards and chips.

2. Semi-closed system: Unlike PPI issued under the closed system, PPI issued under the semi-closed system can be used in multiple organisations, but not all. PPI under this system can only be used by RBI Issued by an approved banking institution or a non-banking institution authorised by RBI. PPIs shall not be issued without the prior approval or authorisation of RBI They may be used for purchase or remittance of money, etc. in a group of clearly identified merchants either on a location basis or by individual institutions that have entered into a specific contract with the issuer of the PPIs for accepting PPIs as a mode of payment.

Such contracts can be made through payment aggregators orPayment GatewayIt does not have to be entered into directly between the issuer and the organisation accepting the PPI as a form of payment. Similar to PPIs issued under a closed system, PPIs issued under a semi-closed system do not allow for the facilitation of cash withdrawals. This is irrespective of whether the PPI is issued by a bank or not.

India's semi-closed-system PPIs include mobile wallets such as Paytm, PhonePe and MobiKwik and payment gateways such as Razorpay and Instamojo. These PPIs enable seamless transactions across a wide range of merchants, making them a popular choice for consumers. It is important to be aware of any associated payment gateway fees that may apply during these transactions.

3. Open System: PPIs under this system can only be issued by banking institutions authorised by the Reserve Bank of India. These instruments can be used for facilitating purchases, remittances, cash withdrawals, etc. Examples of PPIs issued under this system include debit and credit cards. Open System PPIs are integrated with the Unified Payments Interface of India ("UPI").UPI)

Who can issue PPI?

For non-banking entities such as corporations, the eligibility requirements for issuing PPIs need to be met as follows:

The company must be incorporated in India. The minimum paid-up capital of the company must be more than Rs 50 lakhs. The minimum positive net worth must always be Rs. 10 million. For banking institutions, all banks meeting the eligibility criteria laid down by the Reserve Bank of India are permitted to issue PPIs. however, in terms of offering mobile banking transactions, only banks approved by the Reserve Bank of India are allowed to launch mobile-based PPIs. In case of NBFCs and entities, they are allowed to issue PPIs only under semi-closed or closed system.This includes mobile based PPIs.The only condition for issuance of PPIs by NBFCs is that they have to maintain an escrow account with any scheduled commercial bank in the country.

Reserve Bank of India Approved List of Bank PPI Issuers

As per the Reserve Bank of India regulations from 15 February 2024, the following is the list of banks that are authorised to issue prepaid payment instruments in India.

No. Name of Bank1Airtel Payments Bank Limited2American Express Banking Corporation3A. P. Mahesh Co-operative Urban Bank Limited4Au Small Finance Bank Limited5Axis Bank Limited6Bandhan Bank Limited7Bank of Barodaµ8Bank of India9Bank of Maharashtra10Barclays Bank PLC11Canara BankΩ12Central Bank Bank of India13Citi Bank N.A.14City Union Bank Limited15DBS Bank India Limited16DCB Bank Limited17Equitas Small Finance Bank Limited18ESAF Small Finance Bank Limited19Fincare Small Finance Bank Limited20Fino Payments Bank Limited21First Rand Bank22HDFC Bank Limited23ICICI Bank Limited24IDBI Bank Limited25IDFC FIRST Bank Limited26Indian Bankℼ27Indian Overseas Bank28IndusInd Bank Limited29Jana Small Finance Bank Limited30Jio Payments Bank Limited31Karnataka Bank Limited32Karur Vysya Bank Limited33Kerala Gramin Bank34Kotak Mahindra Bank Limited35Lakshmi Vilas Bank Limited36NSDL Payments Bank Limited37Paytm Payments Bank Limited38Pragathi Krishna Gramin Bank39Punjab National Bankα40Punjab & Sind Bank41SBM BANK (INDIA) LTD.42South Indian Bank Limited43Standard Chartered Bank44State Bank of India@45Tamilnad Mercantile Bank Limited46The Ahmedabad Mercantile Co-operative Bank Limited47The Catholic Syrian Bank Limited48The Dhanlaxmi Bank Limited49The Federal Bank Limited50The Gujarat State Co -operative Bank Limited51The Gujarat State Co Co-operative Bank Limited51The New India Co-operative Bank Limited52The Rajasthan State Co-operative Bank Ltd.53TJSB Sahakari Bank Limited54RBL Bank Limited55The Saraswat Co-operative Bank Limited56UCO Bank57Union Bank of Indiaβ58Utkarsh Small Finance Bank Limited (Only for FASTag issuance (Only for FASTag issuance) 59Yes Bank Limited

RBI Approved List of Non-Bank PPI Issuers

No. Name of Approved/Authorised Entity Approval/Authorisation Issue Date & Expiry Date (in brackets)1The Clearing Corporation of India Ltd.11.02.20092AMC Repo Clearing Limited28.02.20233National Payments Corporation of India (NPCI)* With effect from 10.08.2020, all approvals granted to NPCI in relation to international activities have been transferred to NPCI International Payments Limited (NIPL), a wholly owned subsidiary of NPCI.4NPCI Bharat BillPay Limited26.07.20175Infibeam Avenues Limited (formerly Avenues India Private Limited)17.10.20176CSC e - Governance Services India Ltd21.09.20177Euronet Services India Private Limited05.09.20178IndiaIdeas.com Limited02.08.2017 (valid till 30 September 2024)9Ebix Payment Services Private Limited (formerly Itz Cash Card Limited)28.08.2017 (valid till 30 September 2024)10Spice Money Limited22.08.201711Worldline ePayments India Private Limited (formerly Ingenico ePayments India Private Limited and TechProcess Payment Services Limited)16.08.201712One Mobikwik Systems Limited24.01.2019 (valid till 31 March 2025)13PayU Payments Private Limited17.06.202214PhonePe Private Limited03.03.202215American Express Banking Corp., USA31.03.200916Diners Club International Ltd., USA30.06.201017MasterCard Asia/ Pacific Pte. International Incorporated, USA was performing this activity)01.12.201418National Payments Corporation of India12.07.201219Visa Worldwide Pte. Limited, Singapore (Earlier Visa International Service Association, USA was performing this activity)01.04.201020Bahrain Financing Company, BSC ( C)30.09.200921Continental Exchange Solutions Inc, USA28.04.2014 (valid until 31 March 2025)22Mastercard Transaction Services (Canada) Inc. (formerly Transfast Inc. Transfast Inc., Canada and Global Foreign Exchange Inc.)30.09.2009 (valid until 30 September 2024)23MoneyGram Payment Systems Inc, USA.25.05.2009 (valid until 31 May 2025)24Muthuthub, USA.25.05.2009 (valid until 31 May 2025)25Muthub, USA.25.04.2014 (valid until 31 March 2025)26Mastercard Transaction Services (Canada) Inc. 31.05.2009 (valid until 31 May 2025)24Muthoot Finserve USA Inc. {formerly Royal Exchange (USA) Inc.}30.09.200925UAE Exchange Centre LLC, UAE30.09.200926Wall Street Exchange Centre LLC, UAE30.09.200926Wall Street Exchange Centre LLC, UAE30.09.200927Muthoot Finserve USA Inc. Centre LLC, UAE30.09.200927Western Union Financial Services Incorporated, USA31.03.200928Bank of India12.08.200929Euronet Services India Private Limited25.05.200930National Payments Corporation of India15.10.200931Punjab National Bank05.04.201032State Bank of India12.08. 200933Amazon Pay (India) Private Limited (formerly Amazon Online Distribution Services Private Limited)22.03.201734Amica Payment Services Private Limited11.06.202435Appnit Technologies Private Limited22.03.2017 (valid till 31 March 2025)36Bajaj Finance Limited04.05.202137Balancehero India Private Limited18.07.201738Delhi Metro Rail Corporation Limited20.02.201739Dreampurse Technologies Private Limited (Formerly Hip Bar Private Limited)22.08.201640Ebix Payment Services Private Limited (formerly Itz Cash Card Private Limited)25.08.2009 (valid till 30 November 2025)41I Money Pay Private Limited (formerly E-Meditek Global Private Limited)07.10.2016 (valid till 31 December 2024)42Eroute Technologies Private Limited10.05. 202143Euronet Services India Private Limited03.08.202144Garagepreneurs Internet Private Limited30.08.202345Hindon Mercantile Limited18.10. 202346iDisha Info Labs Private Limited14.06.202447India Transact Services Limited30.05.201448LivQuik Technology (India) Private Limited08.08. 2016 (Valid till 30 September 2024)49Manappuram Finance Limited08.02.2017 (Valid till 31 March 2025)50MobilePe Fintech Private Limited08.06.202351Mpurse Services Pvt. Ltd.30.06.2014 (Valid till 30 June 2025)52Nucleus Software Exports Limited22.03.2017 (Valid till 31 March 2025)53Obopay Mobile Technology India Private Limited17.10.2017 (valid till 31 December 2024)54Ola Financial Services Pvt. Ltd. (formerly ZipCash Card Services Private Limited)29.10.2009 (valid till 31 October 2024)55One Financial Services Pvt. Ltd. (formerly ZipCash Card Services Private Limited)29.10.2009 (valid till 31 October 2024) (formerly ZipCash Card Services Private Limited)29.10.2009 (valid till 31 October 2024)55One Mobikwik Systems Limited18.07.2013 (valid till 30 September 2024)56Paul Merchants Finance Private Limited (formerly Paul Fincap Pvt. Ltd.)04.06. 2015 (valid till 30 June 2025)57PayU Payments Private Limited25.07.201658Pay Point India Network Private Limited03.04.201259Phonepe Private Limited ( formerly FX Mart Pvt. Ltd.) 04.06.2015 (valid till 30 June 2025)59Phonepe Private Limited ( formerly FX Mart Pvt. Ltd.)25.08.2014 (valid till 31 August 2024)60Pine Labs Private Limited10.03.201761Pluxee India Private Limited (formerly Sodexo SVC India Pvt. Ltd.)25.08.2014 (valid till 30 August 2024)61Pluxee India Private Limited (formerly Sodexo SVC India Pvt. Ltd. India Pvt. Ltd.,)25.08.200962Premium eBusiness Ventures Private Limited18.12.201463RapiPay Fintech Private Limited (formerly Virgosoft IT Services Private Limited)27.02.2017 (valid till 31 March 2025)64Razorpay Technologies Private Limited25.10.202165Smart Payment Solutions Pvt. Ltd.30. 06.201066Spice Money Limited09.04.2015 (Valid till 30 June 2025)67Tata Payments Limited09.07.202468Transaction Analysts (India) Private Ltd.07. 03.201469Transcorp International Limited26.08.201670Transerv Limited22.02.201671Tri O Tech Solutions Private Ltd.18.01.201772Unimoni Financial Services Limited (formerly UAE Exchange & Financial Services Ltd.)29.10.2009 (valid until 31 October 2024)73Uniorbit Payment Solutions Private Limited (formerly Weizmann Impex Service Enterprise Limited)11.12.2015741Pay Mobileware Private Limited14.05.202475Adyen India Technology Services Private Limited15.07.202476Amazon Pay (India) Private Limited20.02.202477Aurionpro Payment Solutions Private Limited12.06. 202478Boku Network Services IN Private Limited05.04.202479Cashfree Payments India Private Limited19.12.202380Computer Age Management Services Private Limited10.04.202481Concerto Software and Systems Private Limited12.03.202482Decfin Tech Private Limited06.02.202483Digiotech Solutions Private Limited01.01.202484Finacus Solutions Private Limited19.03.202485Finlogic Technologies India Private Limited05.08.202486Google India Digital Services Private Limited19.12.202387Groww Pay Services Private Limited29.04.202488GVP Infotech Limited29.01.202489Hitachi Payment Services Private Limited25.06.202490IndiaIdeas.com Limited31.05.202491Infibeam Avenues Limited04.03.202492Innoviti Technologies Private Limited22.03.202493Juspay Technologies Private Limited06.02.202494Mswipe Technologies Private Limited16.02.202495Nehat Tech Solutions Private Limited19.12.202396NSDL Database Management Limited22.05.202497Open Financial Technolgies Private Limited19.12.202398Payment Gateway Solutions Private Limited19.12.202399R360 Payment Services Private Limited19.12.2023100Razorpay Software Private Limited19.12. 2023101SRS Live Technologies Private Limited10.06.2024102Stripe India Private Limited15.01.2024103Tata Payments Limited01.01.2024104Toucan Payments (India) Private Limited27.02.2024105Transaction Analysts (India) Private Limited18.06.2024106Unlimint IN Private Limited23.04. 2024107Worldline ePayments India Private Limited30.04.2024108Zoho Payment Technologies Private Limited02.02.2024109Adyen India Technology Services Private Limited25.07.2024110Amazon Pay (India) Private Limited25.07.2024111Cashfree Payments India Private Limited22.07. 2024112IndiaIdeas.com Limited29.07.2024113India1 Payments Limited (formerly BTI Payments Pvt. Ltd.)12.02.2014114Hitachi Payment Services Pvt. Ltd.25.11.2013115Tata Communications Payment Solutions Ltd.03.05.2013 (valid till 30 June 2025)116Vakrangee Limited23.01.2014 (valid till 31 March 2025) 117Boson Systems Private Limited (formerly Empays Payment Systems India Pvt. Ltd.) 17.11.2014 (Valid till 15 November 2024)118A.TREDS Limited29.06. 2017119C2FO Factoring Solutions Private Limited04.03.2024120Mynd Solutions Private Limited20.03.2017121Receivables Exchange of India Limited ( RXIL)17.05.2017

Types of semi-closed PPI

There are three types of semi-closed PPI. Depending on the type of PPI, only a certain amount of money can be deposited into the instrument.

Minimum Details PPI: This type of PPI means that only the minimum details of the PPI holder are obtained. For example, only the holder's name and number are captured and the PPI issuer does not capture other details such as address, Pan number,Aadhar number or bank account details etc. In such cases, the maximum amount that can be deposited on PPI is Rs. 10,000. Deposit from bank account only: If the PPI can be deposited only through a bank account and not through any other means such as cash, the maximum amount that can be deposited on the PPI is Rs. 10,000. Full KYC PPI: The maximum amount limit that can be loaded on the instrument will be increased to Rs. 10 lakhs if full KYC of the PPI holder has been obtained and registered by the PPI issuer.

Customer Protection for Prepaid Payment Instruments in India

In order to protect PPI holders and recipients from exploitation and fraud, the RBI requires PPI issuers to state all terms and conditions involved in the use of PPI in clear and simple language.

The PPI issuer's statement must take special care to draw the client's attention to the following terms:

All fees and charges for using PPI. Direct contact information for customer service, such as phone numbers, email addresses, and website URLs. The validity period of the note and the terms and conditions under which the note expires. Terms of depreciation of the value of the instrument after the validity period, if any.

What is the PPI limit for prepaid instruments in India?

The PPI limit is ₹50,000 per month, subject to the total PPI limit (not allowed for one type of small PPI). The limit for loading PPI electronically or online is subject to the overall PPI limit.

concluding remarks

India's prepaid payment instrument, PPI, plays a vital role in India's digital economy.PPI provides convenience and accessibility, making transactions easier and faster. PPIs have witnessed a constant evolution due to technological advancements and changes in consumer behaviour. With the emergence of new technologies, PPI is likely to expand further and revolutionise the way IndiaDegree Digital PaymentsThe way.

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