Payment Wallet: Financial Instrument taking over the Country

  • October 01, 2022
  • Dushyant Sharma
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What is a PPI?

PPI, or a Prepaid Payment Interface, is an instrument that facilitates the following services against the value stored within it. Therefore it is also termed a Prepaid Wallet.

  • Purchase of Goods and Services
  • Conducting Financial Services
  • Enabling remittance facilities

Payment Wallet License

The Payment Wallet is governed as per the provisions of the Payment and Settlement Systems Act of 2007. If you wish to start a Payment Wallet System in India, then you must obtain a Certificate of Authorization from the RBI (Reserve Bank of India). This authorization is also termed as the Payment Wallet License. 

How does a PPI payment works?

Prepaid Payment Instruments (PPIs) have a high monetary value. You can use them to purchase goods as well as services at a fixed amount. These PPI license instruments store a fixed value of the user's amount. This amount can be cash, credit card, or debit card.

How to start a Payment Wallet business in India?

To start a Payment Wallet System or a Prepaid Payment Instrument, you must obtain a Prepaid Wallet License in India. You must be aware of such E Wallet registration in India. We are mentioning some of the examples of Prepaid Wallets currently prevalent in India:

  • Credit Card
  • Debit Card
  • Paper Vouchers
  • Smart Cards
  • Mobile accounts
  • Magnetic Strip Cards

Types of Payment Wallet License in India

You can avail of the following types of Prepaid Payment Wallets in the Country. Each of them has different specifications and operates in a different manner:

Closed Payment Wallets

A Company can register for a Closed Wallet System to issue its customers cashbacks and discount offers specifically to buy the Company's products and services. An example of such a wallet system is Amazon Pay.

Semi-closed Wallet

A company registered as a semi-closed wallet system can do business with a certain group of sellers. The Company restricts the user from conducting financial transactions with its select merchants. An example of such wallet systems is Paytm and Mobikwik.

Semi-Open Wallet

A Semi-Open Wallet license holder can purchase goods at stores that accept digital cards.

Open Wallet

An Open-Wallet system can be used to purchase goods and services from any of the digital or merchandise platforms. Examples of open wallets are debit and credit cards.

Benefits of a Payment Wallet System

The following are the reasons to adopt an RBI PPI license or a Prepaid Payment wallet for conducting digital transactions:

Wallets are Intangible

A Digital Payment Wallet is an intangible financial instrument. Nobody can steal it from you. Also, you cannot lose it.

Make payments in precise Denominations

Users can make precise payments using a payment wallet. Suppose you have to make a payment of Rs. 234.87. You can make such exact payments using payment wallets. All you have to do is authenticate your identity and facilitate the transaction.

Instant Transaction Execution

Payment Wallets execute the financial transactions instantly. It is a huge leap forward from traditional Internet Banking transactions. Earlier, crediting the amount in the beneficiary account would have taken around 12 to 24 hours.

No additional charge on Usage

Users do not have to pay any hidden or additional charges for using the digital prepaid wallet and conducting e-transactions.

No Subscription Charge

There is no need to pay an activation fee, monthly charges, or annual fees, as in the case of internet banking or the annual charge of debit cards.

Wallets offer Incentives and Offers

Prepaid Wallets offer many incentives to the users for transacting using the platform. They also offer rewards for new referrals from existing users.

Easy Crediting Process

You can credit money in the payment wallet in no time. It is an instant process. The fund can be credited into the wallet through net banking, debit cards, etc. The e-wallet provides auto-pay facilities to execute the due payments automatically.  


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Dushyant Sharma
Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.

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