Such transaction will be pre-approved before reaching the UPI system.
The Reserve Bank of India (RBI) has allowed a new facility regarding UPI transactions. The RBI on Friday allowed prepaid payment instruments holders to make and receive UPI payments through third-party mobile applications. According to PTI news, the Reserve Bank said in its circular that it has been decided to enable Unified Payments Interface i.e. UPI payments from/to full KYC prepaid payment instruments through third party UPI applications.
RBI said this regarding this facility
According to the news, RBI has said that an issuer of prepaid payment instruments will be able to make UPI payments only to its full KYC prepaid payment instrument holders by linking their customer prepaid payment instruments to their UPI handle. Such transaction will be pre-approved before reaching the UPI system. The central bank said that a prepaid payment instruments issuer in its capacity as a payment system provider should not include customers of any bank or any other prepaid payment instruments issuer.
Prepaid payment instruments holders will get more flexibility
The purpose of this decision of the Reserve Bank of India is to provide more flexibility to holders of prepaid payment instruments like gift cards, metro rail cards and digital wallets. Currently, UPI payments to/from a bank account can be made using the UPI application of that bank or a third party application provider. However, UPI payments to/from prepaid payment instruments can be made only using the mobile application provided by the issuer of the prepaid payment instruments.
prepaid payment instruments
UPI (Unified Payments Interface) is an instant real-time payment system developed by National Payments Corporation of India to facilitate inter-bank transactions through mobile phones. Prepaid Payment Instruments (PPIs) are instruments that enable purchase of goods and services, conduct of financial services and money transfer facilities against the value stored therein.
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