Mobile payment generally refers to payment services operated under financial regulation and performed from or via a mobile. Mobile payment wallet also referred to as mobile money, mobile money transfer and mobile wallet.Payment wallet license or prepaid payment wallet license in India is issued by RBI. RBI is responsible for issuing guidelines and rule for prepaid payment wallet and responsible for granting the license. 
RBI Payment Wallet License
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What is RBI Payment Wallet License
RBI has Classified Prepaid Payment Wallets Into Three Categories:
- Closed System PPIs:
- Small PPIs:
- Full-KYC PPIs:
Type of Payments Wallets in India
Category of PPIs
- Closed System PPIs: Issued by an entity for facilitating the purchase of goods and services from that entity only and do not permit cash withdrawal e.g. Rapido Wallet, Big Bazar Card. RBI approval/ authorization is not required.
Restrictions of Close System Payment Wallet:
- The closed wallet does not permit cash withdrawal or redemption.
- In case money is stored in the closed wallet, it can only be used to purchase from the particular Site.
- Small PPIs: Issued by banks and non-bank after obtaining minimum details of the PPI holder. It shall be used only for the purchase of goods and services. Funds transfer or cash withdrawals from such PPIs shall not be permitted. It required RBI approval before the commencement of business.
- Full-KYC PPIs: Issued by banks and non-banks after completing Know Your Customer (KYC) of the PPI holder. It shall be used for the purchase of goods and services, fund transfer or cash withdrawal. It requires RBI approval before the commencement of business.
| Basis | Closed PPI | Small PPI | Full KYC PPI |
| Nature | No 3rd Party Involvement | 3rd Party Involvement and settlement | 3rd party Involvement and settlement |
| Cash Withdrawal | No | No | Yes |
| Fund Transfer | No | No | Yes |
| Issuer | Any Organization | Bank and Non-Bank entity with business objectives of financial intermediation except insurance and pension funding | Bank and Non-Bank entity with business objectives of financial intermediation except insurance and pension funding |
| Licensing Authority | MCA | MCA & RBI | MCA & RBI |
| Approval | Not Required | Required | Required |
| Facilitate | Purchase of Own Goods or Services or both | Purchase of Goods and Services of 3rd party | Purchase of Goods and Services, fund transfer or cash withdrawal |
| Capital Requirement | Any Amount | At least INR 5 Cr as Net Owned Fund | At least INR 5 Cr as Net Owned Fund |
| Loading/reloading | By cash, debit to bank account, credit and debit card etc. | Has two form i.e. Small PPI with cash loading facility and Small PPI with no cash loading facility | By cash, debit to bank account, credit and debit card etc. |
| Limit | As per Issuing Party | Load Amount during any month shall not exceed INR 10,000 (Yearly INR 1,20,000) with maximum amount outstanding at any point of time shall not exceed INR 10,000. (However, in case of Small PPI with cash loading facility has restriction even on debit transaction maximum of INR 10,000 in a month) | Amount outstanding shall not exceed INR 2 Lakh at any point of time. In case of pre-registered beneficiaries, the funds transfer limit shall not exceed INR 2 Lakh per month per beneficiary. In other case, limit of fund transfer is INR 10K per month. Fund transfer from such PPIs shall also be permitted to other PPIs, debit cards and credit cards as per given limits above. |
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Brief Procedure for Incorporation of Prepaid Wallet Business
STEP-1: Setup a Company under Company act, 2013 by applying to Registrar of Company.
STEP-2: Filling of Application for approval in Form A as given under Regulation 3(2) of the Payment and Settlement System Regulations, 2008. With fee to Reserve Bank of India for grant of License.
- Composition of the applicant.
- Proof of position of registered office.
- Certificate of Incorporation (COI).
- A detailed report of principle business of the company.
- Management detailed information.
- Statutory auditor of the Company.
- Recent audited balance sheet.
- Name and address of bankers of Company.
- Details of payment system with process flow, technology to be used, security features, inter-operability, etc.
- Expected benefits to Indian the financial systems.
- Amount of own capital proposed.
- Sources of funds.
- Any other information as may be required by RBI.
STEP-3: Screening process shall be initiated by RBI to ensure prima facie eligibility of the applicants
STEP-4: Subject to fulfilling the eligibility criteria and other circumstances, the Reserve Bank of India issues an ‘in-principle’ approval. The validity of in-principle approval issued by RBI shall be six months from the date of granting such in-principle approval.
STEP-5: Company shall submit a satisfactory System Audit Report to RBI within these six months, in case of failing which the in-principle approval shall lapse automatically. The entity can take a one-time extension of six months by making an appeal in writing in advance with valid reasons.
STEP-6: After consideration of all the particulars furnished by entities granted final approval shall commence business within six months from the grant of the Certificate of Authorization
Eligibility Criteria For Payment Gateway Wallet License:
Banks and Non-Bank Finance Companies(NBFC), that comply with the eligibility criteria, would be permitted to issue all categories of payment instruments.
- Only banks which have been permitted to provide Mobile Banking Transactions by the Reserve Bank of India shall be permitted to launch mobile-based prepaid payment instruments (mobile wallets & mobile accounts).
- Other entities would be permitted to issue only closed system prepaid payment instruments and semi-closed system prepaid payment instruments.
- Mobile Prepaid value: Mobile Service Providers are permitted to issue mobile prepaid values. In addition to talk-value, the use of such prepaid value as a payment instrument shall be restricted to the purchase of only such value added digital contents/services which are for use on mobile phones. The use of mobile prepaid value for the purchase of other goods and services shall not be permitted.
Capital Requirements
- Only banks and Non-Bank Finance Companies complying with the Capital Adequacy requirement prescribed by the Reserve Bank of India from time to time shall be permitted to issue prepaid payment instruments.
- A company incorporated in India and registered under the Companies Act 1956 / Companies Act 2013, with the principal objective of the financial business.
- Any financial entity looking for payment wallet authorization from RBI must have a minimum positive net worth of 5 cr.
- Foreign Exchange Prepaid Payment Instruments: Entities authorized under FEMA to issue foreign exchange prepaid payment instruments are exempt from the purview of these guidelines. The use of such payment instruments shall be limited to permissible current account transactions and subject to the prescribed limits under the Foreign Exchange Management (Current Account Transactions) Rules, 2000, as amended from time to time.
AUTHORIZATION PROCESS:
Semi-Closed PPIs Authorization Process
- Any company with the principle objective of finance trade eager of setting up payment wallet systems will apply for RBI Form A as suggested under Regulation 3(2) of the Payment and Settlement Systems Regulations, 2008 along with a minimal fee of INR 10000/-.
- RBI will review the application as per the guidelines of the Payment and Settlement Systems Regulations, 2008, also check the background of the management by obtaining inputs from other regulators, government departments, etc. If Applications are not as per prescribed in the guidelines, They shall be returned without a refund of the application fees.
- The certificate will be valid for 5 years. After five years apply in writing to DPSS, RBI, Central Office, and Mumbai office should be initiated at least three months before the expiry of the validity of Certificate of Authorization
STEP 1
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STEP 2
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STEP 3
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STEP 4
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FAQ`s
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