Out of the many Prepaid Payment Instruments, or PPIs – as they are also referred to, being launched in the market corresponding to an increase in digital transactions, some of the famous ones are E-Wallet and Payment Application for Mobile Users.
PPIs are payment instruments facilitating the purchase of goods and services, including funds transfer, financial services, remittance facilities, etc., against the amount stored on such instruments. The amount stored on such instruments includes the value paid for by the holders by
- debit from a bank account, or
- by credit card payment.
PPI, in simple words, is an E-wallet. You add money to it with the help of your merchant service provider. And use this money for the services available. Such as Mobile Recharge, Online Booking for Movie, Online Bill payment, and so on. While some PPIs also provide a facility to pay a third party or merchant store offline. Many companies in India have already launched this type of e-wallet. For instance PayTM, Airtel Money, Bhim App, etc.
PPIs have emerged as a convenient & portable method of initiating cashless transactions, especially since the currency change of 2016, during which the country experienced a lot of cash crunch.
It is an effective way of bringing transparent, scalable and accountable payments.