Reserve Bank of India (RBI) has now made it even easier to transfer money through Unified Payment Interface Wallet i.e. UPI Wallet. Now customers will be able to access their wallet through third-party apps as well. This means that you will be able to transfer funds from the wallet present on any app to any UPI app.
The Reserve Bank of India has issued a circular allowing payment/transfer from third-party UPI to verified wallets. For this, it will be mandatory for those holding PPI i.e. prepaid payment instruments to do KYC. After this decision of the Reserve Bank, banks or non-banks will be able to issue their own PPI wallets.
Reserve Bank of India – Steps taken to ease digital payments
The purpose of this green signal from the Reserve Bank of India is to ease the process of digital payment. With this, money payments can be accepted through UPI on the PPI wallet and money can also be sent on the UPI platform.
According to the Reserve Bank of India, currently, UPI transactions related to a bank account are done through the bank’s UPI app or third-party UPI, but to do UPI transactions from a digital wallet, the transaction has to be done from the app on which the number is registered.
Understand prepaid payment instruments like this
You currently transact money through apps like Google Pay, PhonePe or Amazon Pay, but this is possible only when these digital payment wallets are linked to a bank account. Now, according to the new Reserve Bank of India rule, you will be able to transact or make payments even through digital payment wallets that are not linked to any bank account.
These will be third-party apps i.e. prepaid instruments. That is a digital wallet in which money has to be deposited first through a bank account, UPI or cash. Then you will be able to pay only that much money.
You use gift cards, metro rail cards etc. These are all PPI wallets. The money that is deposited in them through cash or transfer from the bank account can only be used for payment. But after the new order from the Reserve Bank or after getting their KYC done, money can also be transferred through them to apps like Google Pay, PhonePe etc.
UPI is operated by NCPI
In India, the operation of RTGS and NEFT payment systems is with RBI. Systems like IMPS, RuPay, and UPI are operated by the National Payment Corporation of India (NPCI). The government had made a zero-charge framework mandatory for UPI transactions from January 1, 2020.
How does UPI work?
For UPI service, you have to create a virtual payment address. After this, it has to be linked to the bank account. After this, there is no need to remember your bank account number, bank name, IFSC code etc. The person making the payment simply processes the payment request according to your mobile number.
If you have his UPI ID (e-mail ID, mobile number or Aadhaar number), then you can easily send money through your smartphone. Not only money, but you will also not need net banking, credit or debit card for utility bill payment, online shopping, shopping etc. You can do all these things with the Unified Payment Interface system.
