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Prepaid Payment Instruments (PPIs)

51. Is it mandatory for a PPI issuer to allow interoperability ? +

Ans. Yes, it is mandatory for a PPI issuer to allow interoperability. It is mandatory for the PPI issuer to give the holders of full-KYC PPIs interoperability through authorised card networks and UPI. All modes of acceptance (including QR codes) and PPI issuance are required to be interoperable by March 31, 2022.

52. I am having a Small PPI (with cash loading or without cash loading), but my PPI issuer is not allowing interoperability. Why ? +

Ans. Interoperability is allowed only for full-KYC PPIs.

53. What are the modes of interoperability ? +

Ans. If the PPI is issued in the form of wallet, interoperability across PPIs shall be enabled through UPI. If the PPI is issued in the form of card, the card shall be affiliated to the authorised card network for interoperability.

54. What is the protection available in case of unauthorised transactions involving PPIs issued by banks ?

Ans. Bank PPI issuers shall be guided by RBI circulars DBR.No.Leg.BC.78/09.07.005/2017-18 dated July 6, 2017 or DCBR.BPD.(PCB/RCB).Cir.No.06/12.05.001/2017-18 dated December 14, 2017, as applicable on Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions.

55. What is the protection available in case of unauthorised transactions involving PPIs issued by non-banks ? +

Ans. The framework to limit the liability of customers (PPI holders) against unauthorised transactions in PPIs issued by non-bank issuers is given in paragraph 17 of the MD-PPIs and has come into effect from March 01, 2019. The FAQs given below relate to PPIs issued by non-bank PPI issuers.

56. Does the framework cover all the types of PPIs issued under the MD-PPIs ? +

Ans. Except for the PPIs issued under the arrangement of PPI-MTS as per paragraph 10.2 of MD-PPIs, the framework is applicable to all PPIs issued by authorised non-bank PPI issuers. Even in PPI-MTS, the cases of contributory fraud / negligence / deficiency on the part of the issuer are covered.

57. What is meant by electronic payment transactions under this framework ? +

Ans. For the purpose of this MD, electronic payment transactions can be–

Remote / Online payment transactions: Transactions that do not require physical PPIs to be presented at the point of transactions e.g. wallets, card not present (CNP) transaction, etc.; and
Face-to-face / Proximity payment transactions: Transactions that require physical PPIs to be present at the point of transactions e.g. transactions at ATMs, PoS devices, etc.).

58. Is it mandatory for the customer (PPI holder) to register for SMS alerts ? +

Ans. In order to get protection under this framework, it is mandatory for the customer (PPI holder) to register for SMS alerts.

59. Is the customer supposed to get an alert of transaction in his / her PPI account ? +

Ans. It is mandatory for non-bank PPI issuers to send an SMS alert to the customer for any payment transaction in his / her account. In addition, an e-mail alert may also be sent, wherever registered. The transaction alert should have a contact number and / or e-mail id on which the customer can report unauthorised transactions or notify the objection.

60. Where can the customer report an unauthorised transaction in his / her PPI account ? +

Ans. Non-bank PPI issuers shall provide customers with 24x7 access via website / SMS / e-mail / dedicated toll-free helpline for reporting unauthorised transactions and / or loss or theft of the PPI. Further, a direct link for lodging of complaints, with specific option to report unauthorised electronic payment transactions shall be provided by non-bank PPI issuers on the mobile app / home page of their website / any other evolving acceptance mode.

61. Is the customer protected against any unauthorised transaction after he / she has reported to the issuer about such transactions or loss of instrument ? +

Ans. On reporting of an unauthorised payment transaction or loss of instrument, non-bank PPI issuers shall take immediate action to prevent further unauthorised payment transactions in the PPI account of the customer. Any further transactions debit on such an instrument will be the liability of the issuer.

62. Is the customer protected against a contributory fraud / negligence / deficiency on the part of the non-bank PPI issuer ? +

Ans. The liability of a customer in cases of contributory fraud / negligence / deficiency on the part of the non-bank PPI issuer is zero. PPI-MTS issuers are also covered for such acts / events.

63. Does the customer need to report to the issuer in case there is a contributory fraud / negligence / deficiency on the part of the non-bank PPI issuer ? +

Ans. It is always advisable to report any unauthorised transaction in the account of the customer. However, an issuer cannot deny compensation against contributory fraud / negligence / deficiency on the part of the non-bank PPI issuer, on the ground that the customer has not reported any unauthorised transaction in his / her account.

64. How will the liability of the customer be fixed in cases of third party breach where the deficiency lies neither with the non-bank PPI issuer nor with the customer but lies elsewhere in the system, and the customer notifies the non-bank PPI issuer regarding the unauthorised payment transaction ? +

Ans. The ‘per transaction customer liability’ in such cases will depend on the number of days lapsed between the receipt of transaction communication by the customer from the non-bank PPI issuer and the reporting of unauthorised transaction by the customer to the non-bank PPI issuer. If the issuer is reported within three days’ of receiving of communication, the customer liability will be zero. Similarly, for any such transaction reported between four and seven days of receiving of communication, the customer liability will be limited to a maximum of ₹ 10,000/. Reporting beyond seven days’ time will be dealt in accordance with the Board approved policy of the non-bank PPI issuer.

65. From when will be the number of days mentioned above be counted ? +

Ans. The number of days mentioned above shall be counted after excluding the date of receiving the communication from the non-bank PPI issuer.

66. In cases where the loss is due to negligence by the customer, such as where he / she has shared the payment credentials, who will bear the loss and to what extent ? +

Ans. In cases where the loss is due to negligence by the customer, such as where he / she has shared the payment credentials, the customer will bear the entire loss until he / she reports the unauthorised transaction to the non-bank PPI issuer.

67. Who will bear the loss on the unauthorised transactions carried after reporting of same to the issuer ? +

Ans. Any loss occurring after reporting of the unauthorised transaction shall be borne by the non-bank PPI issuer.

68. After how many days will the eligible amount be credited to the customer’s account ? +

Ans. The non-bank PPI issuer shall credit (notional reversal / shadow reversal) the amount involved in the unauthorised electronic payment transaction to the customer’s PPI within 10 days from the date of such notification by the customer. Such reversal has to be effected even if it breaches the maximum permissible limit applicable to that type / category of PPI. The credit shall be value-dated to be as of the date of the unauthorised transaction.

69. When can one use the notional credit so received ? +

Ans. The notional credit so received can be used on resolution of complaint and establishing the liability of the customer by the non-bank PPI issuer. However, in any circumstances, this period cannot exceed 90 days from the date of receipt of the complaint.

70. Who is responsible to prove that the transaction is not an unauthorised transaction ?

Ans. The burden of proving the customer liability in case of unauthorised electronic payment transactions lies on the non-bank PPI issuer.

These FAQs are issued by the Reserve Bank of India (hereinafter referred to as “Bank”) for information and general guidance purposes only. The Bank will not be held responsible for actions taken and / or decisions made on the basis of the same. For clarifications or interpretations, if any, one may be guided by the relevant circulars, guidelines and notifications issued from time to time by the Bank.