RBI gives a big surprise to UPI users. The Reserve Bank of India (RBI) has made a significant announcement for prepaid card users. They’ve now permitted UPI payments and transactions via third-party mobile applications. This move is set to enhance the convenience for holders of prepaid payment instruments (PPIs), including gift cards, metro rail cards, and digital wallets.
RBI has released a new circular
According to the circular, the RBI has decided to allow UPI payments from fully KYC-compliant PPIs through third-party UPI applications. Additionally, these PPIs will be able to accept UPI payments. The RBI clarified that a PPI issuer will enable its customers to make UPI payments exclusively to their fully KYC-compliant PPI holders by linking them to a UPI handle.
When a UPI transaction is initiated from the PPI on the issuer’s app, it will be authenticated using the customer’s existing PPI identity. This ensures that such transactions are pre-approved before they enter the UPI system.
The RBI emphasized that PPI issuers, acting as payment system providers, should not link customers from different banks or other PPI issuers. Currently, UPI payments from bank accounts can be made using the UPI applications of that bank or any third-party app. However, UPI payments from PPIs can only be processed through the mobile application provided by the PPI issuer.
Understanding the difference between PPI and UPI
PPIs are tools that allow users to purchase goods and services, access financial services, and facilitate remittances based on the stored value. UPI, on the other hand, is a real-time payment system created by the National Payments Corporation of India to streamline inter-bank transactions via mobile devices.
Sweta Mitra
Working in the media for last 7 years. The journey started in the year 2018. For the past few years, my working experience has been in Bengali media. Currently working at Timesbull.com. Here I write like Business, National, and Utility News. My favorite hobbies are listening to music, traveling, food,...
