MUMBAI: The Reserve Bank has allowed the popular unified payments interface (UPI) access to prepaid payment instruments (PPIs) through third-party applications, making it easier for users to link their digital wallets to UPI-enabled apps, which will go a long way in making banking more accessible.
In a circular issued to all prepaid payment instruments issuers such as banks and non-banks, the National Payments Corporation (NPCI) and system participants on Friday, the central bank said henceforth, all prepaid payment instruments (PPIs) can access the UPI through the third-party applications.
Currently, UPI payments from/to a bank account can be carried out using the UPI application of that bank or of any third-party application provider but UPI payments from/to a PPI can only be carried out using the mobile application provided by the PPI issuer only.
The central bank had said in the April 2024 that it would enable UPI payments from/to full-KYC PPIs through third-party UPI applications.
The move will enable PPI holders to make/receive UPI payments through the mobile application of third-party UPI applications, the regulator said, adding the relevant provisions in this regard have been amended in the master directions August 27, 2021 on prepaid payment instruments.
The revised master direction requires that to achieve interoperability through UPI, the PPI holders shall be on-boarded for UPI by their own PPI issuer only. PPI issuer shall only link its customer wallets to the handle issued to it. PPI issuer as PSP shall not on-board customers of any bank or any other PPI issuer.
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