UPI's new feature: Soon, you can deposit cash at ATMs through UPI, says RBI
New Delhi, Apr 5, 2024
Soon, you can deposit cash in banks through the popular Unified Payments Interface (UPI), a real-time payment system that facilitates inter-bank transactions via mobile phones.
In a significant decision, the Reserve Bank of India (RBI) on Friday said it will soon facilitate cash deposit facilities in banks through the popular UPI.
RBI Governor Shaktikanta Das highlighted that Cash Deposit Machines (CDMs) deployed by banks offer customers convenience and reduce the cash-handling burden on bank branches. Until now, the cash deposit feature at these machines has been available exclusively through debit cards.
"Given the widespread adoption and acceptance of UPI, along with the benefits observed from the availability of UPI for card-less cash withdrawals at ATMs, we propose to extend this convenience to cash deposits as well," stated Das.
The RBI plans to issue operational guidelines for this service shortly.
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. Read here
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.
[The Business Standard]
