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UPI access for full-KYC PPIs via third-party apps

Current · Source: Reserve Bank of India · RBI/2024-2025/97 · issued 27 Dec 2024 · ~1 min read
Quick answerRBI now allows full-KYC PPI holders to use third-party UPI apps for payments, breaking the earlier restriction to only the PPI issuer's app. This expands interoperability and convenience for users.
The rule, in the simplest words
How it plays out — a real example

Rahul, a KYC & compliance officer in Indore, helps a customer link their full-KYC PPI wallet to a popular third-party UPI app, enabling them to make seamless payments and receive money through the app. This new feature increases convenience and interoperability for the customer, aligning with RBI's goal of promoting digital payments.

What changed

Previously, UPI payments from PPIs were limited to the issuer's own mobile app. Now, full-KYC PPI holders can link their wallets to third-party UPI applications, enabling payments and receipts through those apps. Authentication for such transactions will use UPI credentials instead of the PPI's wallet credentials.

What it means for you

Banks and non-bank PPI issuers must update their systems to allow full-KYC wallets to be discoverable on third-party UPI apps. This increases competition and user choice, potentially boosting PPI usage. Issuers need to ensure compliance with the revised Master Directions, especially around authentication and PSP roles.

What you must do

Who it affects

All PPI issuers (banks and non-banks), Third-party UPI application providers, NPCI, Full-KYC PPI holders

❓ Common questions

Can all PPIs now be used on third-party UPI apps?

No, only full-KYC PPIs are eligible. The PPI issuer must enable discovery on third-party apps, and authentication will use UPI credentials.

What changes for authentication when using a third-party app?

For transactions on the PPI issuer's own app, existing wallet credentials are used. For third-party apps, UPI credentials (like UPI PIN) will be required.

Does this affect the PSP role of PPI issuers?

Yes, PPI issuers acting as PSPs cannot on-board customers of other banks or PPI issuers. They can only link their own full-KYC PPIs to their UPI handle.

📜 Read the original circular — full text as issued by RBI
RBI/2024-2025/97 CO.DPSS.POLC.No.S972/02-14-006/2024-25 December 27, 2024 All Prepaid Payment Instrument Issuers (Banks and Non-banks), National Payments Corporation of India (NPCI) and System Participants Madam / Dear Sir, Unified Payments Interface (UPI) access for Prepaid Payment Instruments (PPIs) through third-party applications Currently, UPI payments from / to a bank account can be carried out using the UPI application of that bank or of any third-party application provider. However, UPI payments from / to a PPI can only be carried out using the mobile application provided by the PPI issuer. 2. As announced in the Statement on Development and Regulatory Policies dated April 05, 2024 , it has been decided to enable UPI payments from / to full-KYC PPIs through third-party UPI applications. This will enable PPI holders to make / receive UPI payments through the mobile application of third-party UPI applications. The relevant provisions have been amended in Master Directions CO.DPSS.POLC.No.S-479/02.14.006/2021-22 dated August 27, 2021 on Prepaid Payment Instruments (MD-PPIs) (see Annex ). 3. This circular is issued under Section 18 read with Section 10(2) of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007). Yours faithfully, (Gunveer Singh) Chief General Manager-in-Charge Annex Revised provisions of the MD-PPIs: Requirements for achieving interoperability through UPI Previous instructions
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2024-2025/97 · issued 27 Dec 2024. The plain-English explanation above is BankPulse’s own independent summary.
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Topics: Digital Payments / UPI
Most relevant forProduct Manager (Digital & Lending)IT & Cyber SecurityCompliance TeamBusiness Head / Vertical HeadMarketing / Business DevelopmentSenior Management / Board
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Key dataSee the live numbers behind this topic: RBI Penalty Tracker, Credit & Deposit Growth — updated from official RBI data.
Key termsPlain-English definitions of terms in this circular — see the full Indian banking glossary. UPI · KYC / AML · Deposit insurance (DICGC) · NEFT / RTGS
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Who does what — compliance checklist
💻 IT / Systems
  • Update your PPI systems to enable full-KYC wallet discovery on third-party UPI apps.
📜 Compliance
  • Ensure authentication for third-party UPI transactions uses UPI credentials, not wallet credentials.
  • Review and amend your PSP agreements and UPI handle linking to comply with the revised MD-PPIs.
  • Communicate the new feature to full-KYC PPI holders to drive adoption.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are an IT/Systems lead at a bank this circular applies to (All PPI issuers (banks and non-banks), Third-party UPI application providers, NPCI, Full-KYC PPI holders), your first concrete step on “UPI access for full-KYC PPIs via third-party apps” is: “Update your PPI systems to enable full-KYC wallet discovery on third-party UPI apps.” (RBI issued this 27 Dec 2024).

  1. Circular: RBI/2024-2025/97 -- UPI access for full-KYC PPIs via third-party apps
  2. Issued: 27 Dec 2024
  3. Action required: Update your PPI systems to enable full-KYC wallet discovery on third-party UPI apps.
  4. Action required: Ensure authentication for third-party UPI transactions uses UPI credentials, not wallet credentials.
  5. Action required: Review and amend your PSP agreements and UPI handle linking to comply with the revised MD-PPIs.
  6. Action required: Communicate the new feature to full-KYC PPI holders to drive adoption.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12756&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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