RBI introduces new Prepaid Payment Instrument for daily grocery cum small retail payments – Reserve Bank of India (RBI) has introduced a new payment method for digital transaction of small value retail payments like 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.
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.
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.