Prepaid Payment Instruments: Paying the Way for a Brighter and More Secure Future!
Khalid Wani
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Prepaid Payment Instruments (PPIs) are fast becoming a game-changer in India's banking system. They are transforming the way Indians transact, making it more convenient, efficient, and secure. These instruments include smart cards, online accounts, online wallets, stripe cards, paper vouchers, and other forms of digital payments. The primary objective of these instruments is to get access to the amount already prepaid, enabling the purchase of required goods and services without any physical exchange of cash or card.
PPIs have gained widespread popularity in India in recent years, thanks to the country's growing digital infrastructure and rising demand for cashless transactions. According to a report by the Reserve Bank of India (RBI), the number of PPI transactions in India rose from 3.9 billion in 2016-17 to 6.2 billion in 2017-18, with a total value of Rs. 1.4 trillion. The report also states that the number of PPI accounts rose from 177 million in 2016-17 to 285 million in 2017-18.
One of the key benefits of PPIs is that they provide greater financial inclusion to the unbanked and underbanked population in India. PPIs allow people to open digital accounts with minimal documentation and provide access to a wide range of financial services. This enables people to make digital transactions, pay bills, transfer money, and access other banking services without the need for a traditional bank account. This helps in bringing more people under the financial system, reducing cash transactions, and improving financial literacy.
PPIs are also more secure than traditional cash transactions. The risk of theft, loss, or damage to cash is eliminated as PPIs are secured by passwords, PINs, and other authentication mechanisms. Furthermore, PPI transactions are traceable, making it easier to detect and prevent fraudulent activities.
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Another key advantage of PPIs is that they offer greater convenience to users. With PPIs, users can make transactions anytime, anywhere, and from any device. PPIs also allow for faster and smoother transactions, reducing waiting times and queues at banks and other financial institutions. This is particularly beneficial for people living in remote or rural areas where access to traditional banking services is limited.
Lastly, PPIs have the potential to transform India's banking system by offering greater financial inclusion, security, and convenience to users. PPIs are gaining momentum in India and are expected to grow exponentially in the coming years. This is good news for the common man as PPIs offer a more accessible and secure way to transact, reducing their dependence on cash and providing greater financial empowerment.