RBI opens new prepaid payment instrument for transactions up to Rs 10,000 a month

New Delhi: Now, Indian consumers have a new option to make digital payments. The Reserve Bank of India introduced a new Prepaid Payment Instrument (PPI) on Tuesday that will come with a monthly rechargeable limit of Rs 10,000 and can be used for daily purchases of household goods and services.

“To give impetus to small value digital payments and for enhanced user experience, it has been decided to introduce a new type of semi-closed PPI…” the Economic Times quoted the central bank as saying in a release. “These PPIs shall be used only for purchases of goods and services and not for funds transfer.”

This payment instrument can be issued by banks and existing non-bank PPI players, the publication mentioned.

These companies would be able to verify credentials of customers seeking to open their PPI accounts using an OTP sent to users’ verified mobile numbers and digital identification documents recognised by the Department of Revenue, the banking regulator said.

“The minimum details shall necessarily include a mobile number verified with One Time Pin (OTP) and a self-declaration of name and unique identity/identification number of any ‘mandatory document’ or ‘officially valid document’ (OVD) listed in the ‘Master Direction – Know Your Customer (KYC) Direction,” the business daily quoted the RBI as saying in a notification.

Worth mentioning here is that wallet companies like Paytm and PhonePe have been complaining about high KYC costs after the Supreme Court denied permission to access Aadhaar database for full KYC authentication. This new payment method will be helpful for these wallet companies.

The PPI amount can be uploaded only from a bank account linked with a customer’s verified mobile number. Furthermore, RBI has also fixed an annual limit of Rs 1.2 lakh that can be recharged on these accounts.

It may be noted that RBI Governor Shaktikanta Das has earlier told about the possible launch of such an instrument in his Monetary Policy speech on December 5.

 

Source:- timesnownews

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