RBI gives green signal to UPI payments through PPI, full KYC mandatory
RBI: The Reserve Bank of India on Friday allowed prepaid payment instrument holders to make and receive UPI payments through third-party mobile applications. Let's know more about this.
On Friday, the Reserve Bank of India allowed prepaid payment instrument holders to make and receive UPI payments through third-party mobile applications. The central bank said in the circular that it has been decided to enable payments from UPI to/from prepaid payment instruments (PPIs) if full KYC is present on the third-party UPI application.
The circular said, "The PPI issuer will enable UPI payments only to its full-KYC PPI holders by linking its customer PPI to its UPI handle. UPI transactions from PPI on the issuer's application will be authenticated using the customer's existing PPI credentials." Thus, such a transaction will be pre-approved even before it reaches the UPI system.
The RBI said that the PPI issuer, as a payment system provider, should not add customers of any bank or any other PPI issuer to its account. The RBI's decision is aimed at providing more flexibility to holders of PPIs such as gift cards, metro rail cards, and digital wallets.
