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Sujai Adithya
Business Development and Banking & Financial Services Expert
Asked a question last year

What are Prepaid Payment Instruments?

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A PPI can be used to buy goods and services as well as transferring/sending money to a friend, family, etc. Some of the prominent PPIs include Paytm, Mobikwik (semi-closed system PPIs), Gift card (closed system PPIs), Travel/Debit/credit cards (open system PPIs)

 


 

Sujai Adithya
Business Development and Banking & Financial Services Expert

PPIs are instruments that facilitate the purchase of goods and services, including financial services, remittance facilities, etc., against the value stored on such instruments.
At present, RBI allows only three kinds of PPIs including closed system, semi-closed and open PPIs.


Closed System PPIs: These PPIs are issued by an entity for facilitating the purchase of goods and services from that entity only and do not permit cash withdrawal. Example - Myntra Credits

Semi-closed System PPIs: These PPIs are issued by banks (approved by RBI) and non-banks (authorized by RBI) for purchase of goods and services at a group of clearly identified merchant locations/establishments.

Open System PPIs: These PPIs are issued only by banks (approved by RBI) and are used at any merchant for purchase of goods and services.