Semi-Closed System Payment Instruments are payment instruments can be used for purchase of goods and services, including financial services at a group of clearly identified merchant locations/ establishments. These PPIs can be used for third party purchase settlements and the specific contract between the issuer and the merchant is needed for the use of these PPIs. Still, the semi-closed system payment instruments cannot be used for cash withdrawal or redemption by the holder. For higher payments, KYC norms are required. Example of semi closed system payments is Paytm wallets.
