The Reserve Bank of India has proposed the rollout of a new prepaid payment instrument or PPI. This can be used for purchasing goods and services of up to Rs 10,000.
As per the policy statement, "Prepaid Payment Instruments (PPIs) have been playing an important role in promoting digital payments. To further facilitate its usage, it is proposed to introduce a new type of PPI that can be used only for the purchase of goods and services up to a limit of Rs 10,000. The loading or reloading of such PPI will be only from a bank account and used for making only digital payments such as bill payments, merchant payments. Such PPIs can be issued on the basis of essential minimum details sourced from the customer. Instructions in this regard will be issued by December 31, 2019."
To discuss this development, CNBC-TV18 spoke to Vijay Shekhar Sharma, CEO of Paytm.
Sharma said, "As a founder of Paytm I can say that we have been many times making presentations to RBI and different industry bodies that we should have PPI instruments just like what RBI has described where KYC should be minimum and it should be a payment instrument and less like an instrument where another obligation of KYC always arises. So, we are very happy and delighted with what has come out as notification here."
He further added, "Paytm has been a champion of PPI product. Surprisingly Paytm Prepaid Instrument which includes minimum KYC, full KYC all these kind of instruments have been doing offline payments or in-store payments and we have been seeing data on UPI of all merchants, of all UPI apps and we have our own data of PPI, surprisingly Paytm wallet has more usage than all UPI apps combined when it comes to merchant payments. So we were very concerned that we are looking to convert these number of people on KYC but we have not been able to complete the KYC of such large user base due to many cost issues or even coordination with the person whom we are looking to get KYC done, so it has sort of fulfilled the need of the industry."