Good news for UPI users! The Reserve Bank has allowed prepaid payment instruments holders to do UPI transactions through third-party mobile applications.
Until now, UPI payments from bank accounts could be made by linking a bank account through the UPI App of the bank or using any third-party UPI application. However, the same facility was not available for PPIs. PPIs could be used to make UPI transactions only by using the application provided by the PPI issuer.
To provide more flexibility to PPI holders, the RBI has now allowed linking of PPIs through third-party UPI applications. This will help the PPI holders to make UPI payments like bank account holders.
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It has been decided to enable Unified Payments Interface (UPI) payments from/to full-KYC prepaid payment instruments (PPIs) through third-party UPI applications, the central bank said in circular.
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“A PPI issuer shall enable holders of only its full-KYC PPIs to make UPI payments by linking its customer PPIs to its UPI handle. UPI transactions from PPI on the issuer’s application shall be authenticated using the customer’s existing PPI credentials,” it said.
Such a transaction will, thus, be pre-approved before it reaches the UPI system. A PPI issuer, in its capacity as a payment system providers, should not on-board customers of any bank or any other PPI issuer, the Reserve Bank said.
However, UPI payments from/to a PPI can only be carried out using the mobile application provided by the PPI issuer.
UPI is an instant real-time payment system developed by National Payments Corporation of India to facilitate inter-bank transactions through mobile phones.
PPIs are instruments that facilitate purchase of goods and services, conduct of financial services, and enable remittance facilities against the value stored therein.
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