These are payment instruments can be used for purchase of goods and services, including financial services like funds transfer at any card accepting merchant locations (point of sale terminals) and also permit cash withdrawal at ATMs / BCs. An important feature of these PPIs that they can be used for limited cash transfer and cash withdrawals. During the time of demonetization, the RBI raised cash withdrawal limit of these PPIs to Rs 20000. These PPIs can be issued only by banks. Example for open system payment instrument is Vodafone mPesa.
Only banks can issue open system payment instruments. On the other hand, Closed and Semi Closed System Instruments can be issued by NBFC and other entities who avails a license from the RBI.
