3 RBI announcements that will turbocharge UPI, UPI Lite

The Reserve Bank of India (RBI) governor has proposed three new features on UPI to boost digital payments

The Reserve Bank of India on August 10 announced three new features that have the potential to usher in the next era of the payments revolution through the Unified Payments Interface (UPI), including transactions through a conversation with an artificial intelligence system.

Governor Shaktikanta Das announced these measures while sharing the outcome of RBI's bi-monthly policy review. The central bank held the key repo rate steady at 6.5 percent.

Conversational Payments on UPI

Das has proposed to launch Conversational Payments on UPI, enabling users to engage in a conversation with an AI-powered system to initiate and complete transactions in a safe and secure environment.

As AI gets increasingly integrated into the digital economy, conversational instructions hold immense potential to enhance the ease of use and reach of the UPI, which has transformed India’s digital payments ecosystem.

The feature will be available on both smartphones and feature phones-based UPI channels. The facility will initially be available in Hindi and English and subsequently in more Indian languages.

“The RBI governor's announcement today regarding the introduction of conversational payments and offline functionality in UPI Lite marks a pivotal step that is set to reshape India's economic trajectory,’’ Rajsri Rengan, India Head of Development, Banking and Payments at FIS said. She added, these advancements hold the potential to revolutionise the digital payment ecosystem and drive financial inclusion to new heights.

"A simplified AI-based interface can reduce barriers to adoption, especially among senior citizens and people with disabilities, and give them seamless access to their finances," Adhil Shetty, CEO at BankBazaar.com said.

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UPI Lite limit raised

The RBI has raised the transaction limit of UPI Lite to Rs 500 from Rs 200.

Launched by the National Payments Corporation of India (NPCI) in September 2022, UPI Lite allows quick small-value transactions by optimise processing resources for banks, thereby reducing transaction failures.

It allowed users to conduct transactions of up to Rs 200 a day without the need for a pin code, which reduced the transaction time. While the transaction limit has been raised to Rs 500 now, the UPI Lite balance ceiling has been left unchanged at Rs 2,000 to contain the risks associated with relaxation of two-factor authentication.

UPI Lite is available on Paytm, BHIM App, GooglePay and other payments apps. Canara Bank, HDFC Bank, Indian Bank, Kotak Mahindra Bank, Punjab National Bank, State Bank of India, Union Bank of India and Utkarsh Small Finance Bank are already live in UPI LIte board.

Also read | Making UPI payments via RuPay credit cards: Is it worth it?

Offline UPI payments

To promote UPI Lite, the RBI will also introduce offline payments using Near Field Communication (NFC) technology. This feature will not only enable retail digital payments when internet or telecom connectivity is weak or unavailable but also ensure speed with minimal transaction declines. Instructions to NPCI, which manages UPI and UPI Lite, will be issued shortly.