Dec 30, 2024 04:33 PM IST
If you have money in a digital wallet such as Paytm or PhonePe, you can also use it to pay at shops or online without having to switch between different apps
The Reserve Bank of India (RBI) has now allowed users to pay from their digital wallets using any UPI-enabled app, as long as the wallet has also completed full KYC (Know Your Customer) verification.
It means that users will no longer be restricted to a single app for making transactions.
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“A PPI issuer shall enable holders of only its full-KYC PPIs to make UPI payments by linking its customer PPIs to its UPI handle.UPI transactions from PPI on the issuer’s application shall be authenticated using the customer’s existing PPI credentials.
Such a transaction will, thus, be pre-approved before it reaches the UPI system. A PPI issuer, in its capacity as a PSP, shall not on-board customers of any bank or any other PPI issuer,” according to an RBI notification dated December 27, 2024.
“A PPI issuer may also facilitate discovery of its full-KYC PPIs on third-party UPI mobile applications, who, in turn shall enable such PPIs to be linked to their PSP handle/s. Such UPI transactions, from PPIs using third party UPI applications, shall be authenticated using the UPI credentials,” the notification read.
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For example, if you have money in a digital wallet such as Paytm or PhonePe, you can also use it to pay at shops or online without having to switch between different apps.
This means that if you want to pay with your Paytm wallet, you can also do that using Google Pay or PhonePe.
It will also result in faster payments and will encourage more people to start using digital payments, thus, promoting a cashless economy.
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For this, PPI issuers have to link the customers’ PPIs to their UPI handles to allow the holders of only their full-KYC PPIs to make UPI payments.
The issuer’s application will be using the customer’s current PPI credentials to authenticate UPI transactions from PPI, making transactions of this kind pre-approved before entering the UPI system.
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