RBI's new amendment to PPI guidelines allows banks or non-banks to issue specialised prepaid payment instruments for easy digital payments across public transport systems.
"Public transport systems across the country cater to a multitude of commuters on a daily basis. To provide convenience, speed, affordability, and safety of digital modes of payment to commuters for transit services, it has been decided to permit authorised bank and non-bank PPI issuers to issue PPIs for making payments across various public transport systems. These instructions shall come into effect immediately," RBI said.
"Public transport systems across the country cater to a multitude of commuters on a daily basis. To provide convenience, speed, affordability, and safety of digital modes of payment to commuters for transit services, it has been decided to permit authorised bank and non-bank PPI issuers to issue PPIs for making payments across various public transport systems. These instructions shall come into effect immediately," RBI said.
Under the revised guidelines, these specialised PPIs, known as PPIs for Mass Transit Systems (PPI-MTS), "shall contain the Automated Fare Collection application related to transit services, toll collection and parking." They will facilitate payments across several public transport modes including metro, buses, rail, and waterways, as well as tolls and parking facilities, RBI said.
Notably, these PPI-MTS will be exempt from Know Your Customer (KYC) verification requirements and can be reloaded with funds when needed. However, The amount outstanding, in such PPIs shall not exceed Rs. 3,000 at any point in time, and they will not have cash withdrawal, refunds, or funds transfer facilities. Both banks and non-banks are permitted to issue such PPIs.
The operation of these PPIs seems similar to the National Common Mobility Card (NCMC), a prepaid, debit or credit RuPay card that works with a near-field communication (NFC) chip. Users can load funds onto the card from their bank account or digital wallet before using it for transit transactions and can be used offline also. The RuPay platform developed by the National Payments Corporation of India (NPCI) runs NCMC cards.