RBI Monetary Policy: UPI 123Pay Limit Raised to ₹10,000, UPI Lite to ₹5,000 for Easier Payments

The Reserve Bank of India (RBI) has taken significant steps to encourage the use of the Unified Payments Interface (UPI) by raising the transaction limits for UPI 123Pay and UPI Lite. This move aims to enhance the accessibility and convenience of digital payments, particularly for feature phone users and those conducting low-value transactions. The increased limits will likely benefit a wide range of users, from urban to rural areas.

Starting October 9, 2024, UPI 123Pay now allows transactions of up to ₹10,000 per transaction, doubling the previous limit of ₹5,000. This feature is especially beneficial for feature phone users, who can make UPI transactions safely and securely without needing internet access. The UPI 123Pay service was initially launched by the National Payments Corporation of India (NPCI) in March 2022, and its usability has steadily increased since then. With the raised transaction limit, it becomes even more appealing for users who prefer a simple, secure payment method.

For UPI Lite users, the RBI has raised the balance limit to ₹5,000 from ₹2,000. UPI Lite is a feature designed to enable fast, low-value transactions without the need for a UPI PIN, ensuring quicker and smoother processing. Users can now conduct transactions up to ₹1,000 without entering a PIN, making it a perfect solution for everyday payments like groceries, utilities, and other small purchases. This service is available on popular platforms such as Paytm, BHIM, and Google Pay, and is supported by banks including Canara Bank, HDFC Bank, Indian Bank, and State Bank of India.

UPI Lite was launched in September 2022, and since its inception, it has become an integral tool for low-value transactions. The enhanced limit allows users to make even more payments quickly, without the hassle of entering a PIN each time. This is particularly useful for users in rural areas where access to high-speed internet may be limited, but digital payments are still necessary. Additionally, UPI Lite offers a simple solution for smartphone users to manage small transactions with ease.

The rise in transaction limits for both UPI 123Pay and UPI Lite is a positive development for all users, but especially for under-served communities such as senior citizens and people in rural areas. According to Rahul Jain, CFO of NTT DATA Payment Services India, these enhanced limits will allow users to make utility bill payments and send money to other users without the need for high-tech smartphones or even a consistent internet connection.

To further simplify the process, UPI 123Pay offers voice-based UPI transactions through Interactive Voice Response (IVR), allowing users to make payments simply by dialing a number, selecting their payment option, and confirming the transaction by entering their UPI PIN. This system enables users with feature phones to access UPI's secure payment infrastructure without needing a smartphone or internet connection, making digital transactions more inclusive.

Moreover, UPI Lite users can top up their accounts with ease and manage transactions through their regular banking apps. If a user wishes to change their phone, they can simply disable their UPI Lite account and transfer the remaining balance to their bank account, allowing them to set up a new UPI Lite account on the new device without hassle.

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Overall, the RBI's move to raise transaction limits for UPI 123Pay and UPI Lite will likely drive further adoption of digital payments across the country. With more banks coming on board and providing support for these features, UPI's reach will extend even further, particularly in rural and underserved areas. This is a key step towards the government's goal of a cashless economy, ensuring that digital transactions are both accessible and convenient for every citizen.