Chennai: The existing payment platforms will have some competition with the RBI proposing to introduce a new type of pre-payment instrument. This instrument can be used for payment of up to Rs 10,000 for purchase of goods and services.
“Prepaid Payment Instruments (PPIs) have been playing an important role in promoting digital payments. To further facilitate its 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 RBI said.
The loading/reloading of such PPI can be done only from a bank account and it can be used only for making digital payments such as bill payments, merchant payments, etc.
Such PPIs can be issued on the basis of essential minimum details sourced from the customer. The apex bank will issue details about this instrument by December 31.
Currently three types of PPIs are available in the market—closed system PPIs; semi-closed system PPIs and open system PPIs.
PPIs can be issued in the form of cards and mobile wallets.
The major players in the payment space are GooglePay, PhonePe and Paytm. The new type of payment instrument will see entry of new players in the payment space and can pose competition for the existing players.
Currently, most of these payment platforms are powered by government’s united payment interface (UPI). UPI payments have been growing fast in India and UPI is reportedly the best payment interface in the world.