Industry experts have welcomed the decision by the Reserve Bank of India (RBI) to allow third-party apps to use prepaid wallets (PPIs) for UPI payments. At present, users can only transact through the app provided by their PPI issuer. PPIs can come in the form of payment wallets, smart cards, magnetic chips, vouchers and mobile wallets, etc.
This move will provide PPI holders with more options and flexibility, similar to bank account users who can use any UPI app to carry out transactions. Analysts believe that this will promote competition and innovation in the digital payments industry.
Shivaji Thapliyal, Head of Research and Lead Analyst, Yes Securities, said that at the moment, the wallet market had been thrown wide open due to the RBI’s diktat on Paytm Payments Bank. “It would be interesting to see what scenarios could emerge if third-party UPI apps, which would include Paytm, would be able to access other PPI wallets,” Thapliyal noted.
With the RBI’s move, the PPI wallet holders will not have to be completely dependent on the issuer of the PPI wallet. It would, thus, enhance customer convenience and boost the adoption of digital payments for small-value transactions.
Prominent industry leaders such as Shishir Baijal from Knight Frank India, Sanjay Agarwal from AU Small Finance Bank, and Dilip Modi from Spice Money have praised the recent moves by the Reserve Bank of India (RBI). These leaders believe that the RBI's actions will simplify payments for users of prepaid payment instruments (PPIs), create new digital payment opportunities, and drive the acceptance of digital transactions, especially among small businesses.
In its latest announcement, the RBI has maintained the repo rate at 6.5%, as predicted by market analysts. The bank's optimistic outlook is seen as positive for economic growth, which is supported by strong domestic fundamentals.
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Inputs from IANS
