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
- Update your PPI systems to enable full-KYC wallet discovery on third-party UPI apps.
- 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.
Who it affects
All PPI issuers (banks and non-banks), Third-party UPI application providers, NPCI, Full-KYC PPI holders
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.