UPI rule change: Use any UPI app to pay from your wallet as RBI allows interoperability for full-KYC PPI
Prepaid Payment Instruments (PPIs) through third-party UPI applications to provide more flexibility to customers.
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Till now, the UPI application of the bank or any third-party application provider can be used to make UPI payments from or to a bank account. However, UPI payments from/to a PPI can only be carried out using the mobile application provided by the PPI issuer. The regulator is all set to change this rule.
Now wallet holders will no longer have to depend upon the PPI wallet issuer in order to make UPI payments, rather individuals can use third party apps in order to transact through wallet using a UPI.
In a notification dated December 27, 2024, RBI said, “A PPI issuer shall enable holders of only its full-KYC PPIs to make UPI payments by linking its customer PPIs to its UPI handle. UPI transactions from PPI on the issuer’s application shall be authenticated using the customer’s existing PPI credentials. Such a transaction will, thus, be pre-approved before it reaches the UPI system. A PPI issuer, in its capacity as a PSP, shall not on-board customers of any bank or any other PPI issuer.”
“A PPI issuer may also facilitate discovery of its full-KYC PPIs on third-party UPI mobile applications, who, in turn shall enable such PPIs to be linked to their PSP
