The Reserve Bank of India has proposed to launch a new prepaid payment instrument (PPI) that will be used only for transactions of goods and services of Rs 10,000 value.
PPIs are emerging as an important player in boosting digital payments and introducing the new PPI will facilitate its usage further, said the RBI during the monetary review on Thursday.
“To further facilitate its (PPI) usage, it is proposed to introduce a new type of PPI which can be used only for purchase of goods and services up to a limit of Rs 10,000,” the statement said.
The central bank stated that the swiping and recharging of such PPIs can only be done from a bank account and used for bill payments and merchant payments.
Such PPIs can be generated on the basis of necessary minimum details collected from the customer. The RBI said it will provide instructions in this matter by December 31, 2019.
PPIs are mediums to ensure purchase of goods and services, such as financial services, remittance facilities among others against the value loaded on such instruments.
These can be used and recharged by cash or debit to a bank account or by credit card or from other PPIs up to a limit of Rs 50,000 per month. As on now, banks and non-bank entities are allowed to offer and reload such payment instruments.
There are currently three kinds of PPIs permitted by the RBI namely closed system PPIs, semi-closed system PPIs and open system PPIs.