RBI Introduces New Digital PPI for Retails, Grocery Payments

RBI introduces new Prepaid Payment Instrument (PPI) for small retails payment like groceries, local shops etc – Reserve Bank of India (RBI) has launched a new digital payment PPI instrument for digital transactions of small value belong to grocery, local shops etc.

The maximum limit fixed for new PPI is Rs 10,000 per month and maximum of Rs 1,20,000 a year. All the banks and non-banks may issue such PPI to the users.

With the introduction of new PPI guidelines, a lifeline is being given to eWallet companies like Amazon, Phonepe, Paytm etc.

This will  boost the business of these wallet companies that have reeled due to high costs of KYC compliance since the Supreme Court denied them permission to access Aadhar database to complete full KYC authentication.

Read – RBI Implemented New Ombudsman Scheme for Digital Transactions

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 central bank announced in press release on Tuesday. These PPIs shall be used only for purchase of goods and services and not for funds transfer.

Process of opening a new PPI account

The newly introduced payment instrument can be issued by banks and existing non bank PPI players. These companies would be able to verify credentials of customers seeking to open their PPI accounts using an OTP sent to user’s verified mobile number and a digital identification document recognized by the Department of Revenue.

Read – RBI refunds rule for eWallets

Mandatory for opening PPI accounts

1. A mobile number verified with One Time Pin (OTP),

2. 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.