Digitalization Of The Indian Economy|Payment Systems

The demonetization action by the Government of India aimed to encourage and promote a digital India by making payments through digital means and thereby creating a cashless economy to enhance transparency for all transactions throughout India and make every transaction accountable.

In the recent years, the use of mobile banking, smart cards, e-wallets, prepaid cards etc have been increasing in India significantly. Such instruments are called Prepaid Payment Instruments (PPI) and are governed by the Payment & Settlement Systems Act, 2007 (PSS Act) and the Reserve Bank of India (RBI) Guidelines on PPI. Pre-paid payment instruments are payment instruments that facilitate purchase of goods and services, including funds transfer, against the value stored on such instruments which represents the value paid for by the holders by cash, by debit to a bank account, or by credit card.