Money in your PhonePe, Paytm wallet? You can now use it to pay on any UPI app. What RBI's new rules say

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UPI users will now be able to use their wallet money to pay through any other third-party applications. So, what changes? Now if you have money in your PhonePe UPI, to access any of your online wallet, say Paytm wallet. To understand the new rule better, let's understand what the Prepaid Payment Instruments are? The Prepaid Payment Instruments or the PPI are financial tools allowing users to store value and make cashless transactions.

They include wallets, cards, and vouchers, usable for purchases, services, and fund transfers. PPIs are regulated, with limits on value storage and usage. They offer convenience and security, promoting digital transactions and financial inclusion, but may face acceptance and regulatory challenges.

They are integral to modern digital economies, facilitating efficient, accessible monetary exchanges without physical cash. RBI governor Shaktikanta Das on April 5 announced the proposition of permitting the linking of PPIs through third-party UPI applications, to enable PPI users to make UPI payments like regular bank account holders. "To provide more flexibility to PPI holders, it is now proposed to permit linking of PPIs through third-party UPI applications.

This will enable the PPI holders to make UPI payments like bank account holders," Das had said. According to The Economic Times report quoting YES securities' Head of Research, Shivaji Thapliyal, customers will be able to use any of their UPI apps to access any of their wallets, even if the wallet and the UPI app belong to different companies. "Suppose you have a PhonePe Wallet with some outstanding balance in it.