PPIs are payment instruments that facilitate transactions like purchase of goods and services, including funds transfer, against the value stored on such instruments. The value stored on PPIs represents the value paid by the holders by cash through a bank account etc. There are large variety of PPIs including smart cards, magnetic stripe cards, internet accounts, internet wallets or digital wallets, mobile accounts, mobile wallets, paper vouchers and any such instrument which can be used to access the pre-paid amount. PPI sector is regulated by the RBI and as per the RBI regulations, there are three types of PPIs:
(i) Closed system payment instruments
(ii) Semi-closed system payment instruments and
(iii) Open system payment instruments (multipurpose cards).
