 "UPI changes in 2024: Increased limits, new features, security tips")
This year witnessed regulatory changes and technological advancements in the Unified Payments Interface (UPI) ecosystem. Changes include the introduction of enhanced transaction limits for health care and education and enabling higher-value payments to be processed seamlessly. Let us have a look at the changes.
Automatic UPI Lite Wallet top-up
The Reserve Bank of India (RBI), in June, ended the need for additional authentication or pre-debit notifications when transferring funds from a bank account to a UPI Lite wallet. For example, if a user sets a limit of Rs 2,000 and the wallet balance drops below this amount, the wallet will automatically top-up without requiring extra authentication.
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Increased transaction limit
The National Payments Corporation of India (NPCI), in August, raised the UPI transaction limit from Rs 1 lakh to Rs 5 lakh for specific categories. These include payments for taxes (both direct and indirect), as well as payments to hospitals and educational institutions. The Rs 5 lakh cap also applies to transactions related to IPO applications and RBI's retail direct scheme. For other transactions, such as those involving insurance and the stock market, the limit is Rs 2 lakh.
UPI Lite transaction limit increase
Previously, UPI Lite had a maximum wallet limit of Rs 2,000, which has now been raised to Rs 5,000. UPI Lite is used for small-value payments, with the limit for each transaction now set at Rs 1,000, up from Rs 500.
UPI123PAY Limit Update
The transaction limit for UPI123Pay, which enables users to access UPI without a smartphone or internet connection, has been raised from Rs 5,000 to Rs 10,000. Users can complete transactions by making a missed call or dialing an IVR number.
Delegated Payments via UPI
NPCI introduced UPI Circle, allowing a primary UPI user to fully or partially delegate transaction authority to up to five secondary users. The primary user can set transaction limits for each delegated user. Fully delegated users are allowed to spend a maximum of Rs 15,000 per month, with a per-transaction limit of Rs 5,000. In partial delegation, the primary user must authenticate the transaction by entering the UPI PIN for any transactions initiated by secondary users.
What does industry expect from the government on UPI in 2025?
“The industry would expect the government to continue fostering the growth of UPI by providing a conducive regulatory environment, promoting financial literacy and ensuring robust cybersecurity measures. Further expansion of use cases such as cross-border payments and integration with government services would be welcomed,” said Shikhar Aggarwal, Chairman of BLS E-Services.
"Expanding UPI accessibility through offline payment solutions and driving international adoption are also crucial areas for government focus. The recently launched feature "UPI Circle" is also expected to act as a key driver for UPI's growth in 2025," said Prashant Kumar, CEO at Kredit.pe.
What challenges might the UPI ecosystem face next?
“UPI has changed how real-time payments are made in India, and the ecosystem is ever evolving with new offerings coming in regularly – the regulations will also have to continually evolve to make way and for and implementation of the new offerings in the digital payments space,” Zeeshan Khan, partner, Krishnamurthy & Co.
What should users keep in mind while using UPI?
“Users should refrain from sharing sensitive information such as UPI PINs or OTPs under any circumstances, as legitimate entities will never request such details. It is crucial to verify the authenticity of UPI payment requests before approving transactions, particularly in cases involving unfamiliar parties. Users must regularly monitor their bank statements and transaction histories to identify and report any unauthorized activity promptly,” said Kunal Sharma, partner, Singhania & Co.
“Users should always monitor the display of the recipient's name (as per their bank account) at various stages of the transaction, including the final screen where the user inputs their PIN,” said Probir Roy Chowdhury, partner, JSA Advocates & Solicitors.