Thanks to the efforts of businesses like Paytm, PhonePe, and Amazon, unified payments interfaces (UPI) and wallets have merged into our everyday lives in recent years. Users have, however, frequently voiced dissatisfaction with the restriction that wallet money can only be used via the prepaid payment instrument (PPI) issuer's website or mobile application. Any UPI Can Be Used in PPI Wallets.
The Reserve Bank of India (RBI) has suggested permitting the connection of PPIs with outside UPI applications to remedy this problem.
Payments against the monetary value saved in prepaid payment instruments, or PPIs, are made possible by these instruments. These are essentially cards or wallets that users may load with money and use to make online or UPI purchases. When a payment is made with a PPI, funds are taken out of the prepaid account that is linked with the PPI, regardless of the user's bank account. Up until recently, wallets could only be used with applications offered by the same PPI issuer to conduct UPI payments.
RBI governor Shaktikanta Das issued a new regulation on April 5, 2024, allowing PPIs to be linked through third-party UPI applications. This will provide PPI customers with additional options by allowing them to make UPI payments just like bank account holders.
For UPI users, the new RBI regulation will mean major changes. Users will be able to access any of their wallets using any of their UPI apps, regardless of which firms own the wallet and UPI app. Holders of PPI wallets will therefore no longer be entirely reliant on the PPI wallet's provider.
Customers can now effortlessly use their wallet balance on other applications that support UPI, extending the wallet's functionality outside its platform. For instance, a user can access their outstanding balance in their PhonePe Wallet through any other third-party UPI app in addition to the PhonePe app. It is possible to access funds stored in wallets such as PhonePe, Amazon Pay, and Paytm via any third-party UPI application.
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