3 RBI announcements that will amp up UPI, UPI Lite game; here’s all you need to know

10 Aug 2023 , 03:05 PM

The Reserve Bank of India revealed three new capabilities for the Unified Payments Interface (UPI) on August 10, which has the potential to kick off the next era of the payments revolution, including transactions via a chat with an artificial intelligence system.

While announcing the outcome of RBI’s bi-monthly policy review, Governor Shaktikanta Das also highlighted these measures related to UPI.

Here’s a brief analysis that will help you understand these measures better:

Conversational Payments on UPI: Das proposed to launch conversation-based payments on UPI. With this feature, users could be able to engage in a conversation with an AI-powered system to initiate and complete transactions in a secure environment.

Users of both smartphones and feature phones-based UPI channels could be able to benefit from this feature.

Increase in UPI Lite payment limit: The Central Bank has raised the transaction limit of UPI Lite from the existing Rs 200 to Rs 500. UPI Lite was launched by National Payments Corporation in September 2022. It enables faster small-value transactions by optimizing processing resources for banks, hence, reducing the number of transaction failures.

Earlier users were allowed to conduct transactions upto Rs 200 per day without providing pin code details, hence reducing the overall transaction time.

While the transaction limit has been increased to Rs 500, the UPI Lite balance limit has been kept at Rs 2,000 in order to mitigate the risks associated with the relaxation of two-factor authentication.

Users can experience UPI Lite on Paytm, Google Pay, BHIM App, and other payment apps.

Offline UPI Payments: To promote UPI Lite, the RBI said that it will also launch an offline payment facility working on Near Field Communication (NFC) technology. This feature will not only allow seamless retail digital payments but will also provide better speed with minimal transaction declines when users face weak internet or telecom connectivity.

RBI plans to issue instructions to NPCI shortly.

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