The Reserve Bank of India (RBI) has given a big gift to prepaid card holders. Actually, the Reserve Bank has allowed making and receiving UPI payments through third party mobile applications.
Let us tell you that this decision of the Reserve Bank will provide more convenience to the holders of prepaid payment instruments (PPI) like gift cards, metro rail cards and digital wallets.
What is in RBI’s circular
The Reserve Bank said in the circular that it has been decided to enable UPI payments from full-KYC PPIs through third-party UPI apps. Similarly, PPIs will also be approved to receive UPI payments. RBI said – A PPI issuer will enable UPI payments only to its full-KYC PPI holders by linking its customer to a UPI handle. UPI transactions from PPIs on the issuer’s application will be authenticated using the customer’s existing PPI identity. Meaning that such transactions will be pre-approved before reaching the UPI system.
RBI said that as a payment system provider, a PPI issuer should not associate customers of any bank or any other PPI issuer with itself. At present, UPI payment from a bank account can be made using the UPI application of that bank or any third party application provider. However, UPI payment from PPI can be made only using the mobile application provided by the PPI issuer.
Difference between PPI and UPI
PPIs are instruments that enable purchase of goods and services, transaction of financial services and remittance facilities against the value stored in them. UPI, on the other hand, is an instant real-time payment system developed by the National Payments Corporation of India to facilitate inter-bank transactions through mobile phones.
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