RBI MPC : Permits prepaid payment instruments to use third-party UPI apps for making payments

Photo : Moneycontrol 

In his April 5 monetary policy statement, RBI Governor Shaktikanta Das announced a significant development regarding prepaid payment instruments (PPI). He stated that PPIs would now be permitted to link with third-party UPI applications, allowing PPI holders to conduct UPI payments similar to those with traditional bank accounts. This move aims to enhance convenience and accessibility in digital payments. Detailed guidelines on the operational aspects of this decision will be released soon.

Prepaid payment instruments (PPIs) are tools utilized for making payments using stored value. These instruments include prepaid cards, which can be loaded with a specific amount and used for various transactions, such as meal cards like Sodexo or bank prepaid cards, at merchant outlets or online platforms.

Currently, PPI users can only conduct UPI transactions through the specific application provided by the PPI issuer, whether it's a bank or a non-bank entity like PhonePe, Pay U Payments, or One Mobiwik Systems.

Stay informed with the latest news. Follow DXB News Network on WhatsApp Channel

The RBI's proposal entails allowing prepaid cards to integrate with third-party UPI apps like Google Pay, Amazon Pay, and PhonePe for payment purposes. This initiative aims to offer greater convenience and flexibility to users of prepaid cards.

Parijat Garg, a fintech consultant, provided insight into the potential impact of this decision using the example of Pluxee meal cards, formerly known as Sodexo meal cards, commonly distributed by companies to their employees. He explained that currently, users must either carry the physical card or utilize the designated app for payments. However, once the RBI's directive is implemented, individuals will be able to link their Pluxee prepaid wallet with any third-party UPI app, enabling seamless payments at various retail stores.

Moreover, corporate gift cards can also benefit from this integration, allowing users to utilize the balance in their PPI wallet for authorized transactions, similar to how they use their bank accounts linked to UPI apps.

This move by the RBI signifies a significant step towards promoting digital payments and expanding financial inclusion by leveraging the interoperability of prepaid instruments with popular UPI platforms.

#trending #latest #RBIMPC #PrepaidPaymentInstruments #UPIApps #DigitalPayments #FinancialInclusion #Fintech #UPIIntegration #BankingTechnology #CashlessTransactions #RBI #PPI #DigitalIndia #breakingnews #worldnews #headlines #topstories #globalUpdate #dxbnewsnetwork #dxbnews #dxbdnn #dxbnewsnetworkdnn

Sheikh Dr. Sultan bin Mohammed Al Qasimi, Ruler of Sharjah, has issued an Emiri Decree to establish and organize the Sharjah Creative Quarter (SCQ)...Read More.

Ruling BJP and allies proposed 23 changes to the Waqf Amendment Bill, while the opposition suggested 44, but none were accepted...Read More.