Prepaid Wallet License

Package Inclusion :

  • Prepaid Wallet Company Registration 
  • Advice on Wallet Type (Open, Closed & Semi-Closed)
  • Prepaid Wallets IT Planning 
  • Assistance in filing application 
  • IT Infra planning 
  • Assistance in PCI DSS Compliance
  • Advisory on use of AI

Prepaid Wallet License

What is prepaid wallet License?

Prepaid Payment Instruments, also known as PPIs, are the payment instruments which facilitates the goods and services transactions conducted by the consumer, including financial services, remittance facilities etc., against the value stored on such instruments. The PPIs have emerged as a smart and convenient method of initiating cashless transaction in the recent times where the country has experienced a whole lot of cash crunch. It is an effective way of payment carried out it transparency, scalability and accountability.

Generally PPIs are also called as e-wallets

Closed Prepaid Payment Instruments or Closed wallets

these may be issued by any entity which may include individuals, sole-proprietorships, partnership firms etc. for the purchase of goods and services from that entity only.As these instruments cannot be used for payments and settlement for third party transactions, the issue and operation of such do not require approval by the Reserve Bank of India.

Semi-closed Prepaid Payment Instruments or Semi-closed wallets

PPIs under this category can be used for purchase of goods and services from a group of merchants united for this only purpose. Cash withdrawal and redemption is not allowed by the holder of such instruments. All entities including individuals, NBFCs are permitted to carry on the business of semi-closed wallets after getting license from Reserve Bank of India.

Open wallets

This is a type of wallet which can be used to purchase goods and services and also permit cash withdrawal at ATM's. These wallets can be used for purchase of goods including financial services such as funds transfer at merchant locations, also cash withdrawal at automated business correspondents. Thus these are wallets used to buy goods and services, including fund transfer at merchant locations, also permit cash withdrawals at ATM'S. All Visa and master cards fall into this category. Only banks are authorized to issue and operate open-wallets.

Cross Border Transactions

The individuals authorized under FEMA to issue the Foreign Exchange denominated Prepaid Payment Instruments do not attract the provisions of PPI guidelines as per the RBI notification. The transaction limit is set for INR 5000/- for such cross border transactions.

Minimum Capital Requirements

Other conditions relating to capital requirements

  1. Paid-up Equity capital;
  2. Preference shares;
  3. Free Reserves;
  4. Share premium account; and 
  5. Capital reserves representing surplus.

Authorization Process for Non-Bank entities

Prior written permission by Non-Bank entities

All non-bank entities being granted the Certificate of Authorization to issue PPIs in the country shall be required to take written approval from the Reserve Bank in the following cases:

Deployment of money collected on PPIs

The amount of funds collected against the issuance of e-wallets at a point of time could be significant. Moreover, the revenue from funds may also be speedy. In case the settlement of funds is certain and in a timely manner, the confidence of the public and merchants, on the e-wallet system shall increase rapidly.   To guarantee the timely settlement, the issuers shall invest the funds collected only as from the issuance of e-wallets as follow:

The banks shall keep the outstanding balance as a part of ‘net demand and time liabilities’ for maintaining the reserves in the Balance Sheet which shall be calculated on the basis of the balances appearing in the books of the bank as on the date of reporting to the RBI.

The amount lying in the account shall be used only for making payments to the partaking merchant establishments and other permitted payments.

Validity of PPIs License

All PPIs issued by the PPI issuers shall have a minimum validity of one year from the date of its issuance to the PPI holder. The PPI issuers shall intimate the users about the expiry of their PPIs in a timely manner by SMS / e-mail / post or by any other means in the language preferred by the holder indicated at the time of issuance of the PPI. Even if the PPI expires, a grace period of at least 60 days shall be given by the PPI issuer to the customer.

Documents Required

For Prepaid wallet license
  • Name of applicant.
  • Constitution of applicant.
  • Address proof of registered office.
  • Certificate of Incorporation.
  • Main business of company.
For Prepaid wallet license
  • Management information.
  • Statutory auditor of Company.
  • Audited balance sheet.
  • Name and address of bankers of Company.
  • Any other documents as may be required.
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