With more and more people using the Unified Payments Interface (UPI) to make payments, the Reserve Bank of India (RBI) announced various user-friendly measures during the year 2023.
Here is a look at some of the important changes made to UPI during the year.
No OTP authentication for UPI auto payments
The Reserve Bank of India (RBI) has suggested raising the UPI auto payment limits for some transactions without requiring additional factor authentication (AFA), the bank stated today. Payments up to Rs 1 lakh would not require one-time password (OTP) based authentication, according to the release. This new cap will only apply to credit card repayments, insurance premium payments, and mutual fund subscriptions.
Currently, OTP-based AFA kicks in when an auto payment via UPI exceeds Rs 15,000.
UPI payment limits hiked to Rs 5 lakh
The Reserve Bank of India (RBI) raised the transaction limit for UPI payments to hospitals and educational institutions to Rs 5 lakh on December 8, 2023, in an effort to broaden the use of UPI payments. The previous cap was set at one lakh rupees for each transaction.
While announcing the decisions of the Monetary Policy Committee (MPC), RBI Governor Shaktikanta Das said, “The limit for various categories of UPI transactions has been reviewed from time to time. It is now proposed to enhance the UPI transaction limit for payment to hospitals and educational institutions from Rs 1 lakh to Rs 5 lakh per transaction.”UPI Lite X launched
Users can now initiate and complete transactions even in locations with no connectivity, such as underground stations, distant areas, etc., This functionality allows users to send and receive money while fully offline. “Building on the success of UPI LITE feature, the RBI Governor launched UPI LITE X for Offline payments. Through this feature, users can now both send and receive money whilst being completely offline, therefore, allowing users to initiate and execute transactions even in areas with poor connectivity, such as underground stations, remote areas, etc. UPI LITE X will be accessible to anyone with a compatible device that supports Near Field Communication (NFC). UPI LITE payments are faster than other payment methods, as they require less time to process the transaction,” stated a press release from the National Payments Corporation of India (NPCI).
Inactive UPI IDs will be deactivated
The National Payments Corporation of India (NPCI) has asked payment apps such as Google Pay, Paytm, PhonePe etc. and banks to deactivate the UPI IDs and numbers that have not been active for more than one year. The NPCI circular has been issued to all the members of UPI on November 7, 2023. The decision has been taken to prevent the inadvertent transfer of money to unintended recipients in case customers change their mobile number without disassociating their old number from the banking system, NPCI stated. There exists a possibility that that old mobile number can be issued to a new issuer. As per the new guidelines, the following must be done by the Third Party App Provider (TPAP) and Payment Service Providers (PSP) and implement the same by December 31, 2023.
Transaction limit increased to Rs 500
In an effort to promote the use of UPI-Lite wallets in locations with inadequate or nonexistent internet connection, the Reserve Bank of India (RBI) has raised the maximum amount that may be paid offline from Rs 200 to Rs 500. However, the maximum amount that may be spent offline using a payment method is always Rs 2,000.
The PayNow network in Singapore and the Unified Payments Interface (UPI) retail payment system in India joined forces to facilitate speedier transfers between the two countries on February 21, 2023. Users from both nations will be able to access cross-border remittances more quickly and affordably because to this connectivity.
The option was introduced through token transactions with the UPI-PayNow connection by Reserve Bank governor Shaktikanta Das and Monetary Authority of Singapore managing director Ravi Menon. Prime Ministers Lee Hsien Loong of Singapore and Narendra Modi of India participated electronically in the inauguration event.
The Reserve Bank of India (RBI) on February 8, 2023, announced that the UPI merchant payment facility will be extended to inbound travellers to India.
To start with, this UPI facility will be extended to travellers from G-20 countries arriving at select international airports, Das added. The Group of Twenty (G-20) comprises 19 countries (Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, United Kingdom and United States) and the European Union.
Corporate credit card on RuPay network launched
A corporate credit card called “eSvarna” has been introduced by IndusInd Bank on the RuPay network. Any UPI app that is compatible with the eSvarna RuPay credit card can be linked with it in order to make payments. According to a news release issued by IndusInd Bank on December 26, 2023, “the card facilitates smooth transactions at merchant outlets and allows users the flexibility to make UPI payments by linking the card with UPI-enabled apps”.
NPS contributions using UPI-enabled QR code
NPS subscribers can now use the D-remit-based Quick Response (QR) code to invest to their NPS accounts. Subscribers can use any UPI-enabled application to scan the QR code and make contributions, PFRDA said in a circular dated December 6, 2023. The QR code is unique to each subscriber and may be kept offline for payments; the QR codes for Tier I and Tier II are different.
UPI Now, Pay Later
The RBI made it possible to transfer funds over the UPI network from bank credit lines that have been pre-approved. The RBI stated in a notice on September 4, 2023, “Under this facility, payments through a pre-sanctioned credit line issued by a scheduled commercial bank to individuals, with the prior consent of the individual customer, are enabled for transactions using the UPI system.” With this move, you may pay using the UPI and connect these bank-issued credit lines.
The UPI-PayNow integration will allow users of the two quick payment systems in either nation to send money across borders quickly, securely, and affordably via their respective mobile apps. It is possible to send or receive money from India using only a UPI-id, cellphone number, or Virtual Payment Address for money held in bank accounts or e-wallets (VPA).
Conversational payments using UPI and AI
The Reserve Bank of India has said that UPI payments would henceforth be made by artificial intelligence (AI). Payments processed during a chat or message exchange are known as conversational payments. The chat operator and the payment provider are the two parties that exchange money with each other.
Voice commands to send money
Hello-UPI – Conversational Payments on UPI will allow users to make voice-enabled UPI payments via UPI apps, telecom calls, and Internet of Things (IoT) devices, said National Payments Corporation of India (NPCI) in a press release on September 6, 2023.
To transact using UPI, a user will no longer need to manually enter commands. To finish the payment process, they just need to talk to the AI-powered system. The NPCI website has a partner whitepaper titled “Conversational Payments on UPI: Unlocking New Frontiers for Next-generation Payments” that details the two ways it will be accessible: through an in-app purchase through any UPI app, or on-call through a voice call.
UPI interchange fee
The National Payments Corporation of India (NPCI) has proposed that, starting on April 1, 2023, some merchant payments including Unified Payments Interface (UPI) transactions conducted through prepaid devices, such wallets, will be subject to an interchange charge of 1.1%. According to an NPCI circular dated March 24, 2023, the 1.1 percent interchange charge would only be applied to merchant payments to certain merchant categories of more than Rs 2,000. However, if the transaction amount is more, there won’t be any fees.