Features of PPIs:- Semi- closed, Open System, Gift and MTS

Prepaid Payment Instruments (PPIs) can be broadly classified under three types; closed, semi-closed and open system PPIs. Features of PPIs vary based on the type of PPI. Cash withdrawal is permitted only in the case of open system PPIs. All types of PPIs facilitate cashless transactions and they have become an important component of digital banking. PPIs come under the category of payment cards.  PPIs are also permitted to be issued for facilitating cross border transactions (inward and outward) subject to certain conditions.

Features of PPIs (Semi-closed)

Semi-closed PPIs can be of two types :

1. PPIs upto 10,000/- with minimum KYC details of the PPI holder (minimum detail PPI).
2. PPIs upto 1,00,000/-with full KYC compliance of the PPI holder (KYC compliant PPI).

KYC compliance is a process adopted by banks and financial institutions for establishing the identity of a customer by obtaining required identification documents. In the case of minimum detail PPI, the issuer can issue the PPI against mobile number verified with an One Time Pin (OTP), self-declaration of name and unique identification number of either any of the 'Officially Valid Document (OVD) or any of the mandatory documents, as defined under the PML Rules, 2005.

The salient features of 'minimum detail PPI' are as follows :

1. PPIs are reloadable in nature.
2. The amount loaded during any month shall not exceed 10,000/- subject to a maximum of Rs.  1,00,000/-p.a.
3. The amount outstanding in the PPI at any point of time shall not exceed 10,000/-.
4. The total amount debited during any given month shall not exceed 10,000/-.
5. These PPIs shall be used only for purchase of goods and services. Funds transfer to bank accounts or PPIs of same / other issuers shall not be permitted.
6. A 'minimum detail PPI' can be held for a maximum period of 12 months only within which it shall be converted into KYC compliant PPIs. Else no further credit will be allowed.

The salient features of semi-closed 'KYC compliant PPI' are as follows:

1. These PPIs shall be reloadable in nature.
2. The amount outstanding shall not exceed 1,00,000/- at any point of time. No limits for total credits or debits during a month.
3. KYC complaint semi closed PPI can be used for purchase of goods and services as well as funds transfer.
4. Funds transfer is allowed from a 'KYC Complaint PPI' within a limit of 10,000/- per month per holder and the limit can be enhanced p to 1,00,000/- per month per beneficiary, the beneficiary is 'pre-registered' by PPI holder.

Features of PPIs (Open System)

Open System PPIs can be issued only by banks. Open system PPIs shall be issued only against KYC compliance.   

The salient features of Open System PPIs are as follows :

1. Open System PPIs are reloadable in nature.
2. The maximum limit is Rs. 1,00,000/. The amount outstanding in such a PPI shall not exceed 1,00,000/- at any point of time.
3. They can be used for purchase of goods and services, funds transfer and cash withdrawal.

Features of PPIs (Gift)

The salient features of prepaid gift instruments are:

1. Maximum value of each gift PPIs shall not exceed 10,000/-.
2. Gift PPIs shall not be reloadable.
3. Cash-out or refund or funds transfer is not permitted in gift PPIs.
4. The gift PPIs may be revalidated (including through issuance of new instrument) as per the Board approved policy of the issuer.

Features of PPIs (Mass Transit Systems -MTS)

Prepaid Payment Instrument for Mass Transit System (PPI-MTS) is a category of semi-closed prepaid payment instrument for facilitating travel in mass transit systems. It ensures customer convenience and journey to cashless society aimed through digital banking..

The salient features of PPIs for Mass Transit Systems (PPI-MTS) are as follows :

1. PPI-MTS are semi-closed PPIs issued by mass transit system operators.
2. Apart from the mass transit system, such PPI-MTS  are permitted to be used only at other merchants whose activities are allied / related to or are carried on within the premises of the transit system.
3. PPI-MTS are reloadable in nature.
4. Maximum outstanding shall not exceed the limit of 3,000/- at any point of time.
5. Cash-out or refund or funds transfer are not permitted against PPI-MTS
6. PPI-MTS can be revalidated (including through issuance of new instrument) as per the Board approved policy of the issuer.

7. Additional Factor Authentication is not required  for transactions using such PPIs     Prepaid Payment Instrument(PPI) and Digital Banking