Rapid Fire
UPI Transactions Enabled for PPI Holders
- 18 Jan 2025
- 2 min read
The Reserve Bank of India (RBI) has amended its regulations to allow full-KYC Prepaid Payment Instruments (PPIs) holders to perform Unified Payments Interface (UPI) transactions via third-party UPI apps.
- Objective: To allow PPI holders, such as users of digital wallets and gift cards, to make and receive UPI payments via third-party apps like PhonePe, Google Pay, and Paytm, which were limited to the issuer’s app only.
- It aims to enhance flexibility, customer satisfaction, and ease of use, promoting greater participation in the digital payment ecosystem.
- PPIs: PPI are digital wallets and payment tools that allow users to purchase goods and services, transfer funds, and access financial services using the value loaded onto them.
- There are over 1.14 billion PPIs issued by banks and non-banks in India.
- UPI: It is an instant real-time payment system developed by NPCI to facilitate inter-bank transactions through mobile phones.
- UPI accounts for 70% of India's digital transactions in 2023-24.
- In October 2024, UPI processed Rs 23.49 lakh crore across 16.58 billion transactions, marking a 45% increase from 2023.
- The Indian government is also promoting UPI and RuPay cards internationally.
Read More: UPI Payments: Empowering Users, Challenging Banks
