The Reserve Bank of India (RBI) today approved prepaid payment instrument (PPI) users to make and receive UPI payments through third-party mobile applications.

“It has been decided to allow UPI payments to/from full KYC PPIs through third-party UPI apps. This will enable PPI holders to make/receive UPI payments through the mobile application of third-party UPI apps,” the RBI said.

Sharat Chandra, Founder, EmpowerEdge Ventures, said, “RBI’s recent directive aims to improve payments interoperability in line with its Payments Vision 2025. With this move, PPI holders can now make and receive payments UPI seamlessly using popular third-party apps like Google Pay. and PhonePe, overcoming the limitations of platforms specific to PPI issuers such as Paytm or Amazon Pay.

According to Ankush Julka, COO at Mufinpay, one of the main challenges of PUPs is their limited compatibility with traditional banking services and payment platforms. By integrating PPI with UPI, he says the RBI has solved this problem, making it easier for users to link their digital wallets to UPI-enabled apps.

“This change will improve the user experience and provide more convenience to our customers. This will make transactions more seamless, whether paying bills, shopping online or transferring funds, which is crucial to encouraging wider adoption of digital payments,” he said .