RBI Opens UPI Payments to KYC Prepaid Cards via Third-Party Apps

The Reserve Bank of India now allows Unified Payment Interface (UPI) payments for KYC Prepaid Payment Instruments (PPIs) via third-party UPI apps. This is a significant step towards expanding digital payments, offering PPI holders functionality akin to bank account users. UPI's impact on financial transactions is profound and growing.

The Reserve Bank of India has implemented a move to authorize UPI transactions from KYC Prepaid Payment Instruments through third-party UPI applications. Announced in early April, this policy change marks a significant shift in digital payment systems.

This update allows PPI holders to engage in UPI payments via mobile applications of third-party providers. Previously, UPI transactions involving a PPI were restricted to the PPI issuer's platform, while coverage using bank accounts had broader third-party options.

The RBI's new regulation aims to grant PPI holders the same transactional ease as bank account users, thus broadening the applicability of India's leading Unified Payment Interface. With digital payments reaching new pinnacles in India, the government's strategy includes extending UPI benefits globally, furthering financial integration since its 2016 inception.

(With inputs from agencies.)