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RBI allows authorised fintech entities to issue prepaid wallets, cards for public transport systems

Popular fintech apps like Phonepe, Mobikwik, and Amazon Pay, all hold a PPI license, but it’s not immediately clear which of them will start providing transport wallets and what the supported public transport systems will be.

The Reserve Bank of India (RBI) on February 23 updated its guidelines on prepaid payment instruments (PPIs) to allow fintech companies that hold a PPI license to issue wallets and prepaid cards for public transport systems. These can be used to pay for metros, buses, railways, waterways, tolls, and parking. Popular fintech apps like PhonePe, Mobikwik, and Amazon Pay all hold a PPI license, but it's not immediately clear which of them will start providing transport wallets and what the supported public transport systems will be. Currently, various metro networks already partner with fintech companies to enable ticketing. For example, PhonePe allows you to book tickets for the Chennai Metro, but this requires buying a ticket on the app for each journey. With the updated PPI guidelines, fintech companies can partner with metro networks to provide prepaid wallets that can be used like metro cards. "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," the central bank stated. As per the updated master directions for PPIs, PPI for Mass Transit Systems (PPI-MTS), will have the following characteristics: Both banks and non-banks who are authorised PPI issuers are permitted to issue PPI-MTS. PPI-MTS should only be enabled for payments across various modes of public…

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