The Reserve Bank of India (RBI) has introduced a series of significant updates to the Unified Payments Interface (UPI) system, marking a crucial step towards making digital transactions easier, faster, and more efficient for millions of users across India. The upgrades are designed to enhance the overall user experience, allowing for larger transaction limits and the expansion of features that can now be accessed by a broader segment of the population, including those who use feature phones. These changes are expected to have a positive impact on the UPI ecosystem, further strengthening its position as one of the most widely adopted payment systems in India.
One of the key improvements in the latest UPI upgrade is the increase in transaction limits, particularly for feature phone users who rely on UPI123Pay, a service designed to facilitate UPI payments for those using basic mobile phones. Previously, feature phone users were restricted to sending a maximum of Rs 5,000 per transaction. However, with the new changes, the transaction limit for UPI123Pay has been doubled, allowing users to send up to Rs 10,000 in a single transaction. This increase is expected to provide much-needed convenience for users who rely on feature phones for their daily financial transactions, enabling them to send larger amounts of money with greater ease.
It is important to note that this increased transaction limit applies specifically to UPI123Pay, a platform intended for feature phone users, and not to the more commonly used UPI apps such as Google Pay, PhonePe, or Paytm. These smartphone-based UPI apps will continue to allow users to carry out transactions up to Rs 1 lakh per day. However, there is an exception for medical emergencies, which allows for an increased daily transaction limit of Rs 5 lakh. This special provision ensures that users can quickly access funds in times of critical need, such as during medical emergencies, without worrying about transaction limitations.
In addition to the increased transaction limits, another notable upgrade to the UPI system is the expansion of the UPI Circle feature. The UPI Circle enables users to create a shared payment circle with family members or friends, making it easier to manage and monitor shared expenses. Prior to this upgrade, the UPI Circle feature was only available on the BHIM app. Now, the feature is being extended to popular UPI platforms such as PhonePe, Paytm, and Google Pay, allowing users across different platforms to create and manage their UPI Circles.
The UPI Circle feature is particularly useful for parents who wish to give their children limited financial freedom while still maintaining control over the transactions. Through this feature, the primary user (typically the parent) can set specific transaction limits for secondary users (the children) and approve or decline transactions. This setup ensures that young users can make payments for everyday expenses, such as school fees or small purchases, without the need for their own bank accounts. It also provides parents with greater transparency and control over the financial activities of their children, which can be especially valuable in managing family budgets.
As UPI continues to evolve and expand, it has seen remarkable growth in recent years. According to data from the Ministry of Finance, the number of UPI transactions recorded from January to November 2024 reached an impressive 15,537 crore, with the total transaction value crossing Rs 223 lakh crore. This significant increase in transaction volume highlights the growing reliance on UPI as a preferred method of payment for millions of Indians. With the new updates and features, RBI is further empowering users, especially those in rural areas and those who use feature phones, to take full advantage of UPI’s capabilities.
These changes are expected to enhance the accessibility and convenience of UPI for users across India, allowing for smoother and more efficient financial transactions. As UPI continues to expand its reach and capabilities, it is poised to play a pivotal role in the digital financial ecosystem of the country. With millions of users already benefiting from the simplicity and convenience of UPI, these updates are set to further boost its adoption and usage, making it an even more integral part of everyday life for Indians. Whether it’s increased transaction limits, expanded UPI Circles, or better accessibility for feature phone users, the RBI’s efforts to improve the UPI system will undoubtedly contribute to the continued growth of India’s digital economy.
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