RBI's New Initiative to Boost Digital Payments

In a significant move to enhance the flexibility of digital payments, the Reserve Bank of India (RBI) has announced that users of prepaid payment instruments (PPIs) can now engage in Unified Payments Interface (UPI) transactions through third-party mobile applications. This development is set to revolutionize the way users of gift cards, metro cards, and digital wallets conduct their transactions.

Understanding the New Guidelines

According to the RBI's circular, PPI issuers are required to link their full-KYC compliant PPIs to a UPI handle, enabling seamless transactions. These transactions will be authenticated using the customer's existing PPI credentials, ensuring a secure and efficient process.

What Does This Mean for PPI Users?

This initiative by the RBI aims to provide PPI holders with unprecedented flexibility, allowing them to make and receive UPI payments without being confined to the mobile applications provided by the PPI issuers. This is a game-changer for the digital payment ecosystem, promising to enhance user experience and accessibility.

About PPIs and Full-KYC PPIs

PPIs are payment tools that facilitate the purchase of goods and services, access to financial services, and fund transfers based on stored value. Full-KYC PPIs are issued by banks and non-banks after completing the Know Your Customer (KYC) verification process, offering users a wide range of functionalities including cash withdrawals.