UPI Can Be Used To Deposit Cash At Atms Soon: RBI
The Reserve Bank of India (RBI) has announced a significant move to enable cash deposits in banks through the Unified Payments Interface (UPI), a popular real-time payment system widely used for inter-bank transactions via mobile phones.
RBI Governor Shaktikanta Das emphasized the convenience and efficiency of Cash Deposit Machines (CDMs) deployed by banks. These machines not only provide customers with convenience but also reduce the burden of cash handling on bank branches. Until now, the cash deposit feature at CDMs was accessible only through debit cards.
Given the widespread adoption and acceptance of UPI, the RBI plans to extend this convenience to cash deposits as well.
How will this move benefit you?
UPI has traditionally been a popular method for peer-to-peer transactions, bill payments, merchant transactions, and other digital payments. With the new change, you’ll be able to deposit cash at Cash Deposit Machines using your UPI, eliminating the need for an ATM or debit card.
Cash deposit machines
CDMs, functioning similarly to ATMs but with the added capability to deposit cash, provide a direct way to deposit money into your bank account. This is particularly useful for those wanting to deposit cash outside of regular banking hours.
UPI reigns supreme
According to a recent report by Worldline, a global leader in payment services, UPI remains India’s undisputed king of digital payments. Transactions via UPI saw a staggering 56 per cent growth in volume compared to last year’s period, reaching a massive 65.77 billion transactions in the second half of 2023.
Linking of PPIs through UPI
The RBI also intends to enhance UPI’s versatility by allowing Prepaid Payment Instruments (PPIs) to be linked through third-party UPI applications. Currently, to make UPI payments, users must link their bank account either through their bank’s UPI app or a third-party UPI application. PPI users, however, have been restricted to making UPI transactions solely through their PPI issuer’s app.
“To increase flexibility for PPI users, we will now allow PPIs to be linked through third-party UPI applications. This equips PPI holders with the ability to make payments as easily as bank account holders,” the RBI said.
How will users gain from this?
The RBI’s decision to enable PPI linking through third-party UPI apps means users can now integrate their prepaid wallets or cards with these apps. This ensures smooth transactions directly from their PPIs without the prerequisite of transferring funds to a bank account first. This strategic move aims to boost the flexibility and efficiency of digital payments, simplifying transactions for consumers and expanding the range of services accessible through their preferred payment methods.
Operational Guidelines
The RBI intends to issue operational guidelines for this service shortly. This decision reflects the central bank’s commitment to leveraging digital payment systems like UPI to enhance customer convenience and promote a cashless economy.
