- Introduces a Beneficiary Account Name Look-up Facility, aimed at augmenting the security of digital transactions.
- Per-transaction cap for UPI 123Pay has been raised from Rs5,000 to Rs10,000 while the UPI Lite wallet limit has expanded from Rs2,000 to Rs5,000.
Elevated limits for UPI 123Pay are particularly tailored to accommodate India’s 400 million feature phone users.
The Reserve Bank of India (RBI) has announced a significant increase in the transaction limits for two pivotal digital payment systems – UPI 123Pay and UPI Lite.
The per-transaction cap for UPI 123Pay has been raised from Rs5,000 to Rs10,000, while the UPI Lite wallet limit has expanded from Rs2,000 to Rs5,000. These enhancements, as articulated by Governor Shaktikanta Das, are designed to bolster the accessibility and inclusiveness of India’s digital payments landscape.
Unified Payments Interface (UPI) has fundamentally transformed the financial environment in India by facilitating seamless digital transactions, thereby catering to a diverse user base.
The elevated limits for UPI 123Pay are particularly tailored to accommodate India’s 400 million feature phone users, who can engage in secure digital payments without the necessity of smartphone or internet connectivity.
Reducing cash dependency
The system allows users to effortlessly make transactions by dialing *99#, selecting their bank, and entering their details, thus ensuring that even those without sophisticated technology can partake in the benefits of digital finance.
Experts across the industry have lauded these adjustments as a pivotal leap toward enhancing financial inclusion. Siddharth Maurya, Managing Director of Vibhavangal Anukulakara Private Limited, emphasised that this increase addresses the evolving needs of various consumer groups.
Moreover, Raghunandan Saraf, Founder and CEO of Saraf Furniture, predicts that the heightened limits will stimulate higher-value transactions among feature phone users.
By facilitating this demographic’s access to larger payment capacities, the RBI is positioning UPI 123Pay as a key driver in reducing cash dependency within the economy.
Furthermore, the upgrade of the UPI Lite wallet limit to Rs5,000, with a transaction cap now set at Rs1,000, is anticipated to foster a more robust ecosystem for low-value offline digital transactions.
This convenience is critical as it simplifies payment processes and diminishes the need for constant bank connectivity, thus enhancing user experience for routine transactions.
In conjunction with these increases, the RBI is also introducing a Beneficiary Account Name Look-up Facility, aimed at augmenting the security of digital transactions.
This feature, which will extend from UPI and Immediate Payment Service (IMPS) to RTGS and NEFT systems, will enable users to verify recipient names prior to fund transfers, significantly mitigating the potential for errors and fraud.