RBI introduces two new UPI features: Cash deposit and PPI wallet interoperability

The Reserve Bank of India (RBI) has unveiled two new features for Unified Payments Interface (UPI) users, aimed at streamlining transactions and cash deposits. RBI Governor Shaktikanta Das announced these initiatives as part of the monetary policy statement, highlighting their potential to enhance user convenience and digital payment adoption.

New UPI Features:

1. UPI Access for Prepaid Payment Instruments (PPIs) through Third Party Apps:

RBI’s initiative permits individuals to make UPI payments from Prepaid Payment Instruments (PPIs) through third-party apps, expanding customer convenience and promoting digital transactions for small value payments. This means users can now link their PPI wallets with third-party UPI apps to facilitate transactions seamlessly.

 Implications: This directive enhances interoperability among PPI wallets, allowing Full KYC PPI Wallets to function interchangeably. Experts foresee this advancement bringing PPIs on par with bank accounts for conducting UPI transactions via third-party applications like PhonePe and Google Pay.

2. Enabling UPI for Cash Deposit Facility

RBI’s proposal aims to enable cash deposits at Cash Deposit Machines (CDMs) using UPI, mirroring the existing UPI cardless cash withdrawal process. Presently, cash deposits at CDMs primarily rely on debit cards, but this new feature will eliminate the need for physical cards.

Implications: This innovation simplifies cash deposit procedures, transforming them into card-less transactions. Users will only require UPI-enabled bank accounts to deposit cash at CDMs, enhancing banking convenience and efficiency.

Mandar Agashe, Founder & MD of Sarvatra Technologies Pvt Ltd, hailed the UPI-enabled cash deposit as a significant application of UPI, likening it to the ease of making payments via UPI. This move aligns with RBI’s vision to advance digital payments and enhance customer experience in banking transactions.

Overall, these new UPI features mark a significant step towards fostering a more inclusive and efficient digital payments ecosystem in India, catering to the evolving needs of consumers and businesses alike.