RBI has announced that Prepaid Payment Instruments (PPIs) with full KYC will now be able to make UPI payments through third-party apps
Previously, users were limited to using UPI services via apps provided by their wallet users
However, PPI issuers will not be allowed to onboard customers from other banks or PPIs
The Reserve Bank of India (RBI) has announced that Prepaid Payment Instruments (PPIs) with full KYC will now be able to make UPI payments through third-party apps.Â
Previously, users were limited to using UPI services via apps provided by their wallet users.
This change was said in a circular issued on Friday (December 27). The new guidelines allow PPI issuers to let full-KYC PPI holders link their wallets to their UPI handle and make payments using their existing PPI credentials.
These transactions will be pre-approved before reaching the UPI system. However, PPI issuers will not be allowed to onboard customers from other banks or PPIs.
In addition, PPI issuers can now allow third-party UPI apps to discover and link full-KYC PPIs to their Payment Service Provider (PSP) handles. These transactions will be authenticated using the UPI credentials, providing more options for PPI holders to use their wallets across different UPI platforms.
This comes after RBI earlier this year proposed allowing linking of PPIs like digital wallets through third-party UPI applications.
Earlier this year, RBI also increased the cap on transactions processed on UPI 123Pay to INR 10,000 from INR 5,000 earlier. Similarly, the per transaction limit for UPI Lite has also been raised to INR 1,000 from INR 500 earlier.
Introduced in 2022, UPI123Pay is designed for feature phone users. It allows them to access UPI services without an internet connection in 12 languages.Â
UPI transactions dropped by 6.6% month-on-month (MoM) to 15.48 Bnin November, down from 16.58 Bn in October. This decline follows a notable 10% MoM increase in October, which saw one of the sharpest growths in recent months.
Currently, fintech leaders PhonePe and Google Pay continue to dominate the market, with 48.4% and 37.3% market shares, respectively.
