RBI introduces two new UPI features! From cash deposit to PPI wallet interoperability – what they mean for you

New UPI features: RBI governor Shaktikanta Das on Friday announced two new features or measures for Unified Payments Interface (UPI) users, with an aim to enhance ease of transactions and cash deposits. The new announcements were made by Shaktikanta Das as a part of RBI’s monetary policy statement.
The two new UPI features allow users to deposit cash at Cash Deposit Machines using UPI and also make UPI payments from PPIs using third party apps.Let’s understand what the new UPI features are and what they mean for you:

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

What RBI governor Shaktikanta Das said: At present, UPI payments from Prepaid Payment Instruments (PPIs) can be made only by using the web or mobile app provided by the PPI issuer. It is now proposed to permit the use of third-party UPI apps for making UPI payments from PPI wallets. This will further enhance customer convenience and boost adoption of digital payments for small value transactions.
What the new UPI Feature means
RBI announced that individuals can now utilize PPIs such as digital wallets to make payments via UPI using any third-party app. This new directive allows PPI wallet holders (such as PhonePe, Freecharge, etc.) to link their wallets with third-party UPI apps for transactions.
Banking experts anticipate increased interoperability among PPI wallets as a result of this development. Sanjeev Moghe, President & Head of Cards and Payments at Axis Bank, told ET that this will enable all Full KYC PPI Wallets to operate interchangeably, similar to bank accounts and RuPay credit cards, which can be linked to any UPI app.
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Fintech specialists believe that this advancement will bring PPIs at par with the process of making UPI payments using bank accounts. Jyoti Prakash Gadia, Managing Director of Resurgent India, stated that this will enable PPIs to be linked and utilized for digital payments not only through specific apps but also through third-party UPI applications like PhonePe, Google Pay, etc. This will elevate PPIs to the level of bank accounts for customers to conduct UPI transactions via third-party applications.

Enabling UPI for Cash Deposit Facility

What RBI governor Shaktikanta Das said: “Deposit of cash through Cash Deposit Machines (CDMs) is primarily being done through the use of debit cards. Given the experience gained from card-less cash withdrawal using UPI at the ATMs, it is now proposed to also facilitate deposit of cash in CDMs using UPI. This measure will further enhance customer convenience and make the currency handling process at banks more efficient.”
What the new UPI feature means:
Soon, customers will be able to deposit cash at cash deposit machines (CDMs) in banks and ATMs through the UPI app. This new UPI cardless cash deposit method is expected to mirror the existing UPI cardless cash withdrawal process, according to experts. Currently, cash deposits at CDMs primarily require the use of a debit card, whether at banks or ATMs. However, with the introduction of UPI cardless cash deposit, individuals will no longer need to carry a debit card to deposit cash at CDMs in ATMs.
Mandar Agashe, Founder & MD of Sarvatra Technologies Pvt Ltd, told ET thatenabling UPI for cash deposit is another significant application of UPI. Presently, accessing the cash deposit feature requires inserting a debit card, entering the PIN, and selecting ‘deposit’ to complete the process at the ATM or CDM. In the future, this will be a card-less procedure, with users only needing to have UPI enabled on their bank account. This will simplify banking transactions at CDMs, similar to making payments via UPI, he said.