Bajaj Finance gets RBI approval for prepaid payment business
By Lokmat English Desk | Published: May 7, 2021 05:00 PM2021-05-07T17:00:34+5:302021-05-07T17:00:34+5:30
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Bajaj Finance is all set to join the likes of Paytm and Amazon in the prepaid payment segment with the Reserve Bank of India (RBI) approving the non-bank lender’s foray with perpetual validity.
The move is part of Bajaj Finance’s broader strategy to expand its digital offerings.
“We wish to inform that the RBI vide its letter dated 4 May 2021, has granted an authorisation to the Company for issuance and operation of semi-closed Prepaid Payment Instruments with perpetual validity,” the company said.
A semi-closed PPI is effectively a digital wallet but one through which transactions can flow to merchants and establishments other than the one offering the wallet services
The wallet will become a part of Bajaj Pay, which is the company’s bid to provide an integrated platform for all payments solutions. Semi-closed System PPIs allow you to make payments to multiple merchants through the platform.
Cash withdrawal services, however, still remains prohibited.
Besides, it can be like smart card, magnetic chip voucher, mobile wallet. Values can be transferred from cash, debit cards, credit cards and other PPIs.
This PPI does not allow you to make cash withdrawals or third party fund transfers. You can use this system to pay for goods and services.
You can pay multiple merchants through Bajaj Pay. However, cash withdrawals are not allowed. You will need KYC for PPI up to Rs 10,000.
If you are transacting up to Rs 1 lakh, you will have to complete all the KYC procedures. Once Bajaj Pay enters the market, users will have a new payment option.
