RBI monetary policy: UPI 123Pay, UPI Lite limits raised, here's is how it will benefit you

RBI enhanced limits for UPI 123Pay and UPI Lite payment mechanisms.

You will soon be able to do low-value UPI transactions of up to Rs 1,000 without entering the PIN.

To encourage wider adoption of Unified Payments Interface (UPI), the Reserve Bank of India (RBI) governor Shaktikanta Das on October 9 announced an increase in pre-transaction limits for UPI 123Pay and UPI Lite payment mechanisms.

“Increasing the transaction limits is a positive initiative that will help enhance penetration from both transaction and value perspectives,” says Ramakrishnan Ramamurthy, Chief Delivery and Operations Officer – India, Worldline.

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UPI Lite

Launched by National Payments Corporation of India (NPCI) in September 2022, the feature will now allow users to conduct up to Rs 1,000 worth of transactions without a PIN, ensuring quicker processing. Earlier, the limit was Rs 500.

The limit for UPI Lite balance, too, has been raised to Rs 5,000 from Rs 2,000 .

A customer can add funds to UPI LITE from the UPI App. The app will provide an option to top up or add funds to an active UPI LITE account.

UPI Lite is available on Paytm, BHIM App, GooglePay and other such payments apps. Canara Bank, HDFC Bank, Indian Bank, Kotak Mahindra Bank, Punjab National Bank, State Bank of India and Union Bank of India are among the banks live on the UPI Lite board.

A UPI Lite user looking to change the phone should disable the existing account so that the balance is transferred to her bank account. The user can then open a new UPI Lite account on the new device.

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UPI 123Pay

The RBI raised the per-transaction limit in UPI123Pay from Rs 5,000 to Rs 10,000.

Launched by NPCI in March 2022, it’s an instant payment system for feature phone users who can use UPI payment service in a safe and secure manner. IVR is one of the methods to make UPI transactions through feature phones. The users need to dial a number from her feature phone and hear voice menu for various services. Select service you want to use, validate the beneficiary and enter UPI PIN for a transaction.

Internet is not required for making payments through feature phone. While registration of account with UPI 123PAY, users have to set up a 4-6 digit UPI PIN. Users must enter UPI PIN every time she makes the transactions.

This facility is now available in 12 languages which include English, Hindi, Tamil, Bengali, Kannada, Telugu, Malayalam and others.

Benefits to users

"These changes will help broaden access, encourage greater adoption, and ultimately fuel consumption, contributing to the overall growth of the Indian economy,” says Yashwant Lodha, Co-Founder, PayNearby on RBI MPC Policy.

“Under-served categories such as senior citizens, and users from rural India with limited usage of digital means may find this beneficial,” says Rahul Jain, CFO, NTT DATA Payment Services India. He adds that enhanced limits can be useful to make utility bill payments and for payments to other users.