PPIs which include the likes of e-wallets, gift cards and meal coupons are used as substitutes for cash. RBI has said in the 'Statement on Developmental and Regulatory Policies' that KYC compliant PPIs can inter-operate within six months of the revised directions. RBI will issue revised master directions on 11th of October.
A mobile wallet is a way to carry your credit card or debit card information in a digital form on your mobile device. Instead of using your physical plastic card to make purchases, you can pay with your smartphone, tablet, or smartwatch.
There are four types of mobile wallets in India - open, semi-open, semi-closed and closed. Open wallets are the ones that allow you to buy good and services, withdraw cash at ATMs or banks and transfer funds. These services can only be jointly launched with a bank.
M-Pesa by Vodafone and ICICI is one such example. Apart from the usual merchant payments, it also allows you to send money to any mobile numberbank account.
Airtel Money is a semi-open wallet, which allows you to transact with merchants that have a contract with Airtel. You can't withdraw cash or get it back. You'll have to spend what you load.
Then, there are closed accounts, which are quite popular with e-commerce companies, where a certain amount of money is locked with the merchant in case of a cancellation or return of the order, or gift cards.
Lastly, there are semi-closed wallets like PayTM, which do not permit cash withdrawal or redemption, but allow you to buy goods and services at listed merchants and perform financial services at listed locations.