On Friday, the Reserve Bank of India granted permission to banks and non-banking institutions to issue pre-paid instruments (PPIs) for facilitating payments across a range of public transportation systems.
The Reserve Bank, in a notification, highlighted that the introduction of these instruments will offer commuters additional payment alternatives for purchasing tickets, beyond cash transactions. These instruments are expected to provide commuters with the convenience, speed, affordability, and safety associated with digital payment methods for transit services.
Public transport systems serve as a lifeline for a vast number of commuters on a daily basis, and the move aims to provide a seamless, efficient, and secure digital payment experience for transit services, it said.
PPIs, which necessitate authorization from the RBI prior to issuance, are categorized into two types: small PPIs and full-KYC PPIs.
Small PPIs are provided by both banks and non-banking entities after acquiring minimal information from the PPI holder. They are solely intended for purchasing goods and services, with no provision for fund transfers or cash withdrawals from such PPIs.