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RBI – Photo: PTI
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The Reserve Bank of India on Friday allowed prepaid payment instrument holders to make and receive UPI payments through third party mobile applications. It has been decided to enable UPI payments to/from prepaid payment instruments (PPIs) subject to full KYC on third-party UPI applications, the central bank said in the circular.
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The circular said, “The PPI issuer shall enable UPI payments only to its fully-KYC PPI holders by linking their customer PPI to their UPI handle. The PPI to UPI transaction on the issuer’s application will be authenticated using the customer’s existing PPI credentials. Will be done.” Thus, such a transaction will be pre-approved even before it reaches the UPI system.
RBI said that the PPI issuer, as a payment system provider, should not associate with itself the customers of any bank or any other PPI issuer. This decision of RBI aims to provide more flexibility to holders of PPIs like gift cards, metro rail cards and digital wallets.