Cross-platform transactions for UPI wallets: What RBI's new rules entail
The Reserve Bank of India (RBI) recently introduced new regulations that allow users of prepaid payment instruments (PPIs) to conduct transactions via any Unified Payments Interface (UPI) app. Announced by RBI Governor Shaktikanta Das on April 5, the proposal enables PPIs to be linked through third-party UPI applications. This means funds in wallets like PhonePe and Paytm can now be accessed on any third-party UPI apps such as Google Pay or Amazon Pay.
Understanding Prepaid Payment Instruments (PPIs)
Prepaid payment instruments (PPIs) are digital tools that allow customers to store money and conduct cashless transactions. They include wallets, cards, and vouchers that can be used for purchases, services, and fund transfers. These instruments are subject to regulatory limits on value storage and usage. PPIs play a crucial role in today's digital economies by facilitating efficient monetary transactions without the need for physical cash.
RBI aims to provide more flexibility to PPI holders
The new regulations by the RBI aim to provide more flexibility to PPI 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 PPI holders to make UPI payments like bank account holders," said Das. The move is expected to enhance the usability and accessibility of digital wallets for users across platforms.
Cross-platform access to wallets simplified
Shivaji Thapliyal, Head of Research at YES Securities, clarified the implications of the new regulations. He explained that customers can now use any UPI app to access any wallet, even if the wallet and the UPI app are from different companies. This means users are no longer solely reliant on their PPI wallet issuer for transactions, thereby simplifying cross-platform access to digital wallets.
