The RBI has simplified the regime for prepaid payment instruments with a view to enhance seamless adoption of such instruments for digital payments. In this update, we discuss some of the major changes brought by the new regime and its potential implications.
On 27 August 2021, the Reserve Bank of India (RBI) notified a new set of Master Directions on Prepaid Payment Instruments (PPI Directions) under the Payment and Settlement Systems Act, 2007.
The PPI Directions regulate the issuance and operation of certain types of Prepaid Payment Instruments (PPIs) in India. PPIs are payment instruments that facilitate purchase of goods and services, financial services, remittance facilities, etc., against the value stored therein.
The PPI Directions consolidate the erstwhile Master Direction on Issuance and Operation of Prepaid Payment Instruments dated 11 October 2017 (2017 PPI MD) and subsequent circulars issued by the RBI in respect of different aspects relating to PPIs. This update highlights some of the key changes introduced in the PPI regime by the PPI Directions and briefly analyses their potential impact.
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