RBI enables PPI users to access UPI through third-party apps

On Friday, the Reserve Bank of India (RBI) announced that full-KYC Prepaid Payment Instruments (PPIs) can now be linked to third-party UPI applications. This change allows PPI users to access the Unified Payments Interface (UPI) ecosystem like bank account holders do, promoting greater inclusivity and convenience.

Previously, PPI holders were limited in their use of mobile applications provided by their PPI issuers. This lack of interoperability created challenges for users who preferred third-party UPI apps, known for their user-friendly interfaces and additional functionalities.

The RBI's announcement, first proposed during the April 2024 Monetary Policy Meeting, aims to address these limitations. “Currently, UPI payments from bank accounts can be made by linking a bank account through the UPI app of the bank or any third-party UPI application. However, this option was not available for PPIs. PPIs could only be used to make UPI transactions through the application provided by the PPI issuer. To provide more flexibility to PPI holders, we now propose to allow the linking of PPIs through third-party UPI applications. This will enable PPI holders to make UPI payments just like bank account holders. Instructions regarding this will be issued shortly,” stated the RBI during the Monetary Policy Committee Meeting Outcomes of April 2024.​