RBI Greenlights UPI Payments via Prepaid Wallets

The Reserve Bank of India has authorized the use of prepaid payment instruments (PPIs) for UPI transactions on third-party apps. This move provides PPI users like gift card or digital wallet holders more flexibility by allowing transactions to be authenticated with existing PPI credentials.

The Reserve Bank of India has announced a significant policy change, allowing users of prepaid payment instruments (PPIs) to make Unified Payments Interface (UPI) transactions through third-party mobile applications.

This development means that customers with full-KYC PPIs, such as gift cards or digital wallets, can link their PPI accounts to UPI applications and authenticate transactions with their current PPI credentials before the transaction enters the UPI system.

By enabling this capability, the RBI aims to offer greater flexibility and choice to PPI holders in managing their transactions, similar to the current facility available for bank accounts.

(With inputs from agencies.)