E-wallet is a component of the payment system. The word “payment system” is defined in India to mean a system that enables payment to be effected between a payer and a beneficiary, involving clearing, payment or settlement service or all of them.
In India, E-wallet comes under the legally recognized term - “Prepaid Payment Instruments”. Prepaid Payment Instruments (PPIs) are defined in the RBI Guidelines issued under the Payment and Settlements Systems Act, 2005.
Only those companies incorporated in India and have a minimum paid-up capital of Rs. 500 lakh and minimum positive net worth of Rs. 100 lakh at all the times are permitted to issue wallets in India.