In September 2024, the National Payments Corporation of India (NPCI) introduced the UPI Circle feature, allowing users to add a secondary user to their bank account for making UPI payments. Now available to all users across India, UPI Circle offers flexibility in managing family or friends as authorized secondary users for UPI transactions. Here’s a step-by-step guide to setting up and using UPI Circle.

Setting Up UPI Circle in the BHIM App

Currently, UPI Circle is available only on the BHIM app, with plans to roll it out to Google Pay and other UPI-enabled apps soon. Both the primary account holder and secondary user need the BHIM app installed on their devices to use this feature.

Steps for Primary Account Holder:

1. Find UPI Circle: Open the BHIM app and look for the “UPI Circle” option.
2. Add Secondary User:
   • Select the Add Family or Friends button.
   • Enter the secondary user’s UPI address (or scan their QR code) and phone number for verification. The UPI address can be found in the secondary user’s BHIM app.
3. Choose Delegation Type:
   • Partial Delegation: The primary account holder manually approves each payment request from the secondary user.
   • Full Delegation: The secondary user can make payments up to Rs 15,000 per month without approval. You can adjust this limit if needed.
4. Set Up Payment Limits:
   • If using Full Delegation, enter the monthly limit for the secondary user, up to Rs 15,000.
   • Set an end date for the delegation duration.
5. Choose Bank Account:
   • Select the bank account for payments and tap Proceed to send an invitation to the secondary user.

Steps for Secondary User:

1. Accept Invitation: The secondary user will receive a notification to join the UPI Circle.
2. Review and Accept Terms: Check the Terms and Conditions and tap Accept to activate UPI Circle.

Making Payments with UPI Circle

Once UPI Circle is set up, the secondary user can make payments with ease:

1. Initiate Payment:
   • Scan a UPI QR code or select a contact in the BHIM app.
   • Choose the primary account holder’s bank account to proceed.
2. Complete Transaction:
   • If the secondary user has Full Delegation, the transaction completes instantly.
   • If under Partial Delegation, the primary account holder must manually approve the payment from their BHIM app.
3. Receiving Payments with UPI Circle
   • Currently, UPI Circle only allows secondary users to send money or make payments. If a secondary user needs to receive a payment, they can share the UPI address or QR code of the primary account holder.

Frequently Asked Questions (FAQs) About UPI Circle

• 1. Does the secondary user need a bank account?
• No, a bank account isn’t required for the secondary user. The primary account holder’s account will handle payments.
• 2. Can secondary users be under 18 years old?
• Yes, secondary users can be under 18, making this a great option for parents to add children for controlled UPI payments.
• 3. What happens when the Rs 15,000 limit is reached in Full Delegation?
• Once the limit is reached, no further payments can be made by the secondary user. The primary account holder can remove and re-add the secondary user to reset the limit at the start of a new month.
• 4. Is UPI Circle available on Google Pay or PhonePe?
• Currently, UPI Circle is only available on the BHIM app. Testing is underway for Google Pay, with future plans to expand.
• 5. Which banks support UPI Circle?
• All banks that support UPI payments are compatible with UPI Circle.
• 6. Is UPI Circle safe?
• Yes, UPI Circle is regulated by NPCI and RBI, ensuring the same level of security as standard UPI.
• 7. Can I switch between Full and Partial Delegation?
• To change between Full and Partial Delegation, you need to remove and re-add the secondary user as there’s no option to switch modes directly within the app.

With UPI Circle, managing transactions among trusted contacts becomes more convenient and controlled, providing an efficient way to handle shared or delegated payments securely.

In today’s digital landscape, the Unified Payments Interface (UPI) has become the preferred choice for quick and seamless transactions, especially when it comes to cashback rewards. Unlike traditional methods that require bank account numbers and IFSC codes, UPI apps enable instant transfers, often within seconds. While options like credit cards, debit cards, and net banking are still available, UPI’s rise can largely be attributed to its cashback incentives. With so many apps claiming to offer the best cashback, how do you find the right one? Here’s a list of the top 10 UPI apps offering cashback in 2024 to help you maximize your rewards.

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Top 10 UPI Apps for Cashback in 2024

App	Launch Year	Founder	Revenue	Total Downloads
PhonePe	2015	Sameer Nigam & Rahul Chari	INR 1646 Crores	Over 500 Million
Google Pay	2017	Google	INR 1467 Crores	Over 1 Billion
Paytm	2010	Vijay Shekhar Sharma	INR 7990 Crores	Over 500 Million
CRED	2018	Kunal Shah	INR 393 Crores	Over 10 Million
BHIM UPI	2016	NPCI	Not Applicable	Over 100 Million
Amazon Pay	2007	Amazon	INR 2000 Crores	Over 100 Million
MobiKwik	2009	Bipin Preet Singh	INR 560 Crores	Over 50 Million
FreeCharge	2010	Kunal Shah & Sandeep Tandon	INR 287 Crores	Over 10 Million
Payzapp	2015	HDFC Bank	N/A	Over 10 Million
JioPay	2016	Mukesh Ambani	N/A	Over 100 Million

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Understanding UPI Cashback

UPI cashback is a promotional reward provided on eligible transactions, effectively lowering the transaction cost. It comes in various forms, such as flat cashback, percentage-based cashback, or category-specific cashback. Rewards usually range from ₹5 to ₹200 depending on the type of transaction, amount, and offer.

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Detailed Overview of the Top 10 UPI Apps

1. PhonePe

• Features: Simplified interface, supports multiple bank accounts, automatic payments, and regular cashback rewards.
• Pros: Easy management of accounts, rewarding scratch cards, good customer support.
• Cons: Lacks secure login options, some transactions may get delayed.

2. Google Pay (GPay)

• Features: Strong security, easy online shopping, cashback rewards via digital scratch cards.
• Pros: User-friendly, enhanced security, regular cashback.
• Cons: Occasional delay in rewards.

3. Paytm

• Features: User-friendly, QR scanning for easy payments, diverse bill payment options.
• Pros: Multiple payment options, user rewards, extensive reach.
• Cons: Cluttered interface, room for improved design.

4. CRED

• Features: Cashback on credit card payments, expense tracking, timely reminders.
• Pros: Unique rewards system, focus on financial wellness.
• Cons: Limited to specific transactions.

5. BHIM UPI

• Features: Highly secure, supports Aadhaar integration, rewards for new users.
• Pros: Simple, government-backed, secure transactions.
• Cons: Limited features compared to private players.

6. Amazon Pay

• Features: Easy one-click purchases, Amazon Pay Later, and regular cashback.
• Pros: Convenient for Amazon users, fast payments, good rewards.
• Cons: Cashback mostly limited to Amazon transactions.

7. MobiKwik

• Features: Mobile wallet, bill payments, and Buy Now Pay Later (BNPL) options.
• Pros: Versatile payment options, middle-class focus.
• Cons: Cashback offers are inconsistent.

8. FreeCharge

• Features: Fast payments, bill reminders, mutual fund investments.
• Pros: Broad payment options, investment features.
• Cons: Limited reward options.

9. Payzapp

• Features: Supports online and offline payments, integrated with HDFC Bank.
• Pros: Rewarding with various cashback and loyalty points.
• Cons: Limited to HDFC users.

10. JioPay

• Features: Supports multiple payment modes, international transactions.
• Pros: Secure, fast, great for Jio users.
• Cons: Rewards primarily cater to Jio ecosystem.

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These UPI apps not only make transactions easier but also offer cashback and rewards to users. From daily expenses to large purchases, the right UPI app can help you save significantly. Consider the features and reward structures of each app to find one that aligns with your needs.

In the rapidly evolving landscape of digital payments, one innovation stands out for its simplicity and transformative potential: Unified Payments Interface (UPI) links. Introduced by the National Payments Corporation of India (NPCI) in 2016, UPI has revolutionized the way transactions are conducted in India. By enabling seamless and instant transfers between bank accounts using a mobile device, UPI has become a cornerstone of the country’s digital economy. This article delves into the rise of UPI links, their impact on digital transactions, and their potential to shape the future of payments.

The Genesis of UPI

Unified Payments Interface (UPI) was developed with the vision of creating a real-time payment system that could facilitate inter-bank transactions in a secure and user-friendly manner. Unlike traditional payment methods that relied on card details or bank account numbers, UPI introduced a unique approach where users could link multiple bank accounts to a single mobile application and use a virtual payment address (VPA) to send or receive money. This innovation eliminated the need to share sensitive financial information, making transactions more secure and convenient.

How UPI Links Work

A UPI link is essentially a URL that, when clicked, directs the user to a UPI-enabled application where they can authorize a transaction. Here’s a step-by-step overview of how UPI links work:

1. Generation of UPI Link: A merchant or individual generates a UPI link through their UPI-enabled app by entering the amount to be paid and other details.
2. Sharing the Link: The link can be shared via various channels such as SMS, email, social media, or even QR codes.
3. Customer Action: The recipient clicks on the link, which opens their UPI app and pre-fills the transaction details.
4. Authorization: The user authorizes the payment using their UPI PIN, and the transaction is completed instantly.

This seamless process has significantly simplified the payment experience, making it accessible to a broader audience.

Advantages of UPI Links

1. Convenience

UPI links eliminate the need for manual entry of payment details, reducing errors and saving time. Users can make payments with just a few taps on their smartphones.

2. Security

By using UPI links, sensitive information such as bank account numbers and IFSC codes remain confidential. Additionally, each transaction requires a UPI PIN, adding an extra layer of security.

3. Cost-Effective

For businesses, UPI links offer a low-cost alternative to traditional payment gateways, reducing the overhead costs associated with transaction fees.

4. Widespread Adoption

UPI links are supported by a vast network of banks and financial institutions, making them universally accessible across different platforms and devices.

Impact on Digital Transactions

1. Boosting E-Commerce

UPI links have been instrumental in driving the growth of e-commerce in India. With their integration into online shopping platforms, customers can make quick and secure payments, enhancing their overall shopping experience.

2. Facilitating Peer-to-Peer Payments

UPI links have made it easier for individuals to transfer money to friends and family. Whether it’s splitting a bill at a restaurant or sending a gift, UPI links offer a hassle-free solution.

3. Empowering Small Businesses

For small businesses and freelancers, UPI links provide a simple and efficient way to accept payments without the need for complex infrastructure. This has opened up new opportunities for entrepreneurs across the country.

4. Enabling Financial Inclusion

UPI has played a crucial role in bringing financial services to the unbanked and underbanked populations. By leveraging the ubiquity of mobile phones, UPI links have made digital transactions accessible to a larger segment of society.

Future Potential of UPI Links

The success of UPI links in India has set a precedent for other countries to follow. As digital payments continue to evolve, several trends and innovations could further enhance the potential of UPI links:

1. International Expansion

Efforts are underway to make UPI available for cross-border transactions, which could revolutionize international remittances and trade.

2. Integration with Emerging Technologies

The integration of UPI with emerging technologies such as blockchain and artificial intelligence could enhance security, efficiency, and user experience.

3. Personal Finance Management

UPI links could be leveraged for personal finance management tools, helping users track their spending, set budgets, and achieve their financial goals.

4. Expansion into New Sectors

Beyond e-commerce and peer-to-peer payments, UPI links could find applications in sectors such as education, healthcare, and government services, further driving digital adoption.

Conclusion

The rise of UPI links represents a significant milestone in the journey towards a cashless society. By offering a secure, convenient, and cost-effective payment solution, UPI links have unlocked new possibilities for businesses and consumers alike. As technology continues to advance and adoption rates soar, the potential of UPI links to transform the digital payments landscape is immense. Embracing this innovation will not only enhance economic growth but also pave the way for a more inclusive and digitally empowered future.

In response to the growing demand for cashless payment options among passengers, the Karnataka State Road Transport Corporation (KSRTC) has launched an initiative to integrate Unified Payments Interface (UPI) payments across its extensive bus network. This initiative aims to make daily commuting more convenient by reducing the dependency on cash transactions and addressing common issues related to exact change, which often lead to delays and misunderstandings between passengers and conductors.

To facilitate this transition to cashless ticketing, KSRTC has equipped over 10,000 of its buses with state-of-the-art Electronic Ticketing Machines (ETMs). These advanced ETMs support a wide range of payment methods, including UPI, debit, and credit card payments, creating a seamless and efficient payment experience for commuters. With KSRTC’s fleet of approximately 8,800 buses now armed with this technology, the ETMs are set to transform the ticketing experience by speeding up transactions and reducing cash handling onboard. Plans for further deployment are also in place, with more buses expected to be equipped following comprehensive training for conductors on the new system.

KSRTC Transport Minister Ramalinga Reddy shared his thoughts on the system’s advantages, emphasizing how it will streamline fare collection. “This system directly addresses the recurring issue of passengers needing exact change. Now, both passengers and conductors can experience greater convenience and smoother transactions. Payments can be made through UPI as well as through debit and credit cards, which makes the entire process quicker and more reliable,” he said. In addition, the ETMs will soon support the National Common Mobility Card and KSRTC-issued bus passes, which will further enhance passenger convenience. This feature is set to roll out within the next month, allowing passengers to validate their passes directly through the machines.

KSRTC’s Managing Director, V. Anbu Kumar, provided further insight into the technological advancements involved in the initiative. “We are upgrading our ticketing system with the introduction of 10,245 Android-based smart ETMs, which feature modern touchscreens, wireless connectivity, and faster processing speeds. These devices replace the traditional ETMs that we have relied on for nearly two decades, marking a major step forward in KSRTC’s commitment to modernization,” he explained.

In line with its vision to adopt cutting-edge technology, KSRTC recently piloted a dynamic QR payment system, which enables passengers to pay directly via a QR code on the ETMs. After a successful test, KSRTC now plans to roll out this QR-based payment feature across all smart ETMs by the end of the month, enabling even faster and more flexible payment options. With this move, KSRTC has become the first transport corporation in Karnataka — and one of the few in India — to integrate digital payment solutions on such a wide scale.

This extensive initiative is being carried out in collaboration with EbixCash Ltd., which has been contracted to implement an Intelligent Transport Management System (ITMS) for KSRTC. Under this five-year contract, EbixCash Ltd. will design, install, maintain, and operate the ITMS, providing KSRTC with integrated digital payment solutions and a comprehensive cashless ticketing system. The system will not only enhance operational efficiency but also improve the overall passenger experience, paving the way for smarter urban mobility in Karnataka.

As part of KSRTC’s long-term vision, the corporation aims to deploy an additional 15,000 devices over the next five years. This expansion plan will be implemented alongside EbixCash Ltd.’s ITMS framework, bringing KSRTC closer to its goal of a fully automated fare collection system. With these efforts, KSRTC is setting a new standard in public transportation by embracing technology and prioritizing passenger convenience, safety, and satisfaction.

Unified Payment Interface Circle: A New Way to Share UPI Access with Family and Friends

The Unified Payment Interface (UPI) has revolutionized how we handle digital transactions, offering a fast and seamless way to send and receive money. The new UPI Circle feature takes this convenience further, enabling users to share UPI access with others—even those who may not have a bank account linked to UPI. This feature is designed to allow a primary UPI user to delegate transaction capabilities to trusted individuals, such as family members or close friends, without compromising security or control over the account. The National Payments Corporation of India (NPCI) describes UPI Circle as a secure, innovative way to make UPI transactions easier for multiple users.

UPI Circle can be especially helpful for families with members who may not have their own bank accounts, such as senior citizens, children, or dependents. By setting up UPI Circle, a primary account holder can enable multiple people to conduct transactions from a single UPI-linked account, providing more flexibility and convenience.

Key Features of UPI Circle

1. Secondary User Access: Secondary users can make transactions from the primary user’s account with permissions, even if they don’t have a bank account linked to UPI. This is ideal for dependents or anyone in your circle who needs easy access to funds without setting up their own UPI account.
2. Limited Delegation: A primary user can assign transaction rights to up to five secondary users, while each secondary user can accept delegation from only one primary user. This keeps transactions secure and within trusted groups.
3. Transaction Controls: UPI Circle includes built-in options for setting transaction limits and approvals, so you can maintain control over spending and authorize every transaction if needed.
4. Flexible Payment Options: UPI Circle lets families with shared expenses or single-account setups make payments directly, simplifying money management within households.

Step-by-Step Guide to Setting Up UPI Circle

To begin using UPI Circle, follow these steps:

1. Open the BHIM App and Navigate to UPI Circle

• Open your BHIM UPI app, go to the “UPI Circle” section, and click on “Add Family or Friends.” You’ll be given two options to add users: either scan their QR code or manually enter their UPI ID.

1. Add ID of Secondary User

• After selecting “Add to My UPI Circle,” a new page will prompt you to enter the phone number of the individual you wish to add. This person must already be saved in your contacts; otherwise, they cannot be added. Enter their UPI ID and phone number to complete the addition.

1. Select the Type of Access

• You’ll have two options for access type:
  • Spend with Limits: Allows you to set a fixed transaction limit for the secondary user. They can make transactions within this limit without further approvals.
  • Approve Every Payment: Each transaction initiated by the secondary user will require approval from the primary user before processing. This is ideal for added control.
• Choose the access type based on your needs and click on “Proceed.”

1. Set Spending Limits (If Using “Spend with Limits”)

• If you’ve chosen “Spend with Limits,” you’ll need to define specific parameters:
  • Allowed Monthly Spends: Set the maximum amount the secondary user can spend each month.
  • Authorization End Date: Choose an end date for when this delegation will expire.
  • Bank Account for Deduction: Select the bank account from which funds will be debited for transactions.
• After confirming these details, click on “Proceed” and enter your UPI PIN to authorize the settings. The secondary user is now added to your UPI Circle and can transact according to the defined limits.

Important Things to Know About UPI Circle

To ensure a smooth and secure experience, here are a few key points to keep in mind when using UPI Circle:

• App Version Requirement: UPI Circle is available on the BHIM app version 3.8.1 and above. Ensure your app is up to date before trying to access this feature.
• UPI IDs and Contacts: To simplify the setup, make sure you have the UPI ID and contact information of anyone you wish to add to your UPI Circle handy. The person must also be saved in your contacts.
• Control Over Your Funds: Transactions will not occur until the secondary user completes a transaction, and you can monitor every transaction in real-time. This ensures that your money remains secure and under your control.
• Activation of Spending Limits: While full delegation limits activate after 30 minutes, the secondary user can still request approval for any urgent transactions from the primary user in the interim.
• Approval Notifications: The primary user will receive notifications for any required transaction approvals. These can be accessed through the “Approve to Pay” section or by tapping the bell icon on the app’s homepage.
• 24-Hour Cooling Period: When a new member is added to the UPI Circle, a 24-hour cooling period is activated. During this time, the secondary user’s transaction limit is capped at ₹5,000. After this period, they can transact up to the full limit set by the primary user.

Benefits of UPI Circle

UPI Circle brings several advantages for users looking to share account access in a safe, controlled way:

• Convenience for Families: It simplifies shared expenses, letting family members access a single account for payments without needing their own UPI-linked accounts.
• Greater Financial Inclusion: UPI Circle offers digital payment access to family members who may not have a bank account, like children or elderly parents, making transactions easy and inclusive.
• Enhanced Security: With controlled limits and approval options, the primary user retains full oversight of their funds while allowing others to conduct limited transactions.

By allowing you to share UPI access securely, UPI Circle represents a new level of flexibility and convenience in digital transactions. Whether for shared household expenses, assisting a family member, or simply enabling secure access to funds, UPI Circle makes financial management easier for users with shared financial needs.

Google Pay has introduced a revolutionary new UPI feature aimed at transforming digital transactions in India, allowing users to make payments without needing a bank account. Tailored specifically for the Indian market, this innovation is designed to make everyday payments more accessible and convenient, easing the process of sharing expenses or transferring money to family and friends. This feature marks a significant shift in India’s digital payments landscape, supporting millions of users, including those without access to traditional banking services, in joining the cashless economy.

At the heart of this update is the “UPI Circle” feature, which enables primary Google Pay account holders to authorize trusted family members or friends to make payments using the primary account, even if they don’t have their own bank account. This dual-user setup within a single UPI account offers both flexibility and enhanced convenience, making it possible for individuals without bank accounts to participate in digital payments. For instance, UPI Circle could be especially beneficial in households where only one person has a bank account, yet other family members need access to funds for essential transactions.

Security and control are core considerations in this new feature, and Google Pay has introduced two levels of account delegation for primary users: Partial Delegation and Full Delegation. These options provide account holders with customizable control over how secondary users access and use the funds in the UPI account.

1. Partial Delegation: This option is ideal for users who want to keep a close watch on all outgoing funds. In Partial Delegation, primary users can limit secondary users to “requesting payments” only, ensuring that all transactions require approval from the main account holder. This setting is perfect for scenarios where a primary user, such as a parent or guardian, wants to enable a young family member to make payments under supervision. It empowers secondary users to initiate payments but still gives the main account holder the final say, ensuring peace of mind for all parties involved.
2. Full Delegation: This option provides even more independence to secondary users while maintaining a controlled spending environment. In Full Delegation, primary users can set a monthly spending cap—capped at Rs 15,000—for secondary users. Once this cap is set, secondary users can make payments freely up to this amount without requiring further approval. This level of delegation is well-suited for families who wish to allocate a fixed amount for monthly expenses, such as groceries or school fees, and trust secondary users to manage these funds independently within the limit. It offers a practical way to empower family members while ensuring responsible usage within a set budget.

Complementing the UPI Circle feature, Google Pay has also introduced UPI Voucher (or eRUPI), adding another layer of convenience and accessibility. UPI Vouchers are prepaid, digital vouchers that can be linked to a mobile number and used for payments without a bank account. These vouchers are perfect for a variety of use cases, such as gifting funds to friends and family or enabling cashless transactions for individuals without direct bank access. Whether it’s a birthday gift, a one-time allowance, or a donation to a cause, eRUPI vouchers allow users to share funds easily, quickly, and securely.

eRUPI vouchers also have the potential to support small businesses or individuals who receive payments for goods or services. Recipients can use these prepaid vouchers as digital currency, bypassing the need for bank-linked digital payments. This feature not only broadens access but also aligns with India’s broader push toward financial inclusion, providing greater access to digital finance for those outside the formal banking system.

With these new UPI features, Google Pay has reimagined digital transactions in India, making payments easier, safer, and more inclusive. This update enhances the Google Pay experience, opening up new possibilities for users across the country and helping bridge gaps in financial access. By making transactions accessible to those without bank accounts and enhancing control for primary users, Google Pay is supporting financial inclusion while ensuring that the platform remains flexible, secure, and user-friendly.

In a recent move to broaden digital payment options for feature phone users, the Reserve Bank of India (RBI) raised the transaction limit for UPI 123Pay from ₹5,000 to ₹10,000 per transaction. Announced in the RBI’s Statement on Development and Regulatory Policies on October 9, 2024, this decision aligns with RBI’s ongoing efforts to enhance financial inclusivity. The National Payments Corporation of India (NPCI) further confirmed this change in a circular dated October 25, 2024, setting a compliance deadline for financial institutions by January 1, 2025.

Understanding UPI 123Pay: A Game-Changer for Feature Phone Users

UPI 123Pay, launched by the NPCI, is a revolutionary solution that enables Unified Payments Interface (UPI) transactions on non-smartphone devices like feature phones. This voice-based digital payment system was developed to bridge the accessibility gap, empowering users without smartphones or a stable internet connection to conduct secure transactions. Designed to be user-friendly, UPI 123Pay allows these users to make payments at no additional cost, expanding digital financial services to a broader demographic, especially in rural and underserved areas.

UPI 123Pay offers a range of transaction methods that cater to different preferences, making digital transactions more inclusive and straightforward for feature phone users. Here’s a closer look at the different ways UPI 123Pay can be used:

1. IVR or Call-Based Transactions: This method allows users to dial a specific IVR (Interactive Voice Response) number provided by their bank. After calling, they select the desired service option from a menu using the phone’s keypad. The user can then input the transaction amount and finalize it by entering their UPI PIN. This straightforward process is ideal for users who prefer audio guidance through each step of the transaction.
2. Missed Call-Based Transactions: This option is designed for added convenience, especially for payments made at merchant locations. Users give a missed call to a designated number displayed at the merchant’s location. They then receive an automated callback to verify the transaction, after which they enter their UPI PIN to complete the payment. This method provides a contact-free, simple way to pay without requiring direct internet access or mobile data.
3. Feature Phone App Transactions: For feature phones that support basic apps, a downloadable UPI application is available. Through this app, users can either scan QR codes to make purchases or use the “Send Money” option by entering the recipient’s details, amount, and UPI PIN. This app extends the functionalities of UPI to feature phone users, making their payment experience similar to that on smartphones.
4. Sound-Based Payments (Sound Frequency): In this unique method, users make a call to the designated IVR number, select the “pay merchant” option, and complete the transaction by tapping their phone on a merchant device until they hear a unique sound frequency. They then enter the amount and UPI PIN to finalize the payment. This method combines both auditory and interactive elements, enabling quick and secure transactions.

New Guidelines for UPI 123Pay Users and Compliance Requirements

Here are the main updates and requirements for all institutions supporting UPI 123Pay services:

1. Higher Transaction Limit: The transaction limit has now doubled from ₹5,000 to ₹10,000 per transaction, effective immediately. This increased limit provides feature phone users with greater financial flexibility, enabling them to handle higher-value payments without restrictions.
2. Secure Registration Process: For enhanced security, users registering for UPI 123Pay must now complete an Aadhaar-based OTP (One-Time Password) onboarding. This step ensures safe verification, adding an additional layer of security for new users and safeguarding against unauthorized transactions.
3. Enhanced Monitoring and Tagging: All participating financial institutions and UPI service providers are required to separately tag and monitor UPI 123Pay transactions. This requirement ensures that the usage and performance of UPI 123Pay services are effectively tracked, enabling better service improvements and response to user feedback.
4. Integration of UPI Numeric ID Mapper: To improve the identification and tracking of UPI 123Pay transactions, members are advised to integrate the UPI number functionality using a numeric ID mapper. This tool simplifies tracking, making it easier to separate UPI 123Pay transactions from those on smartphone-based UPI apps.
5. Guidelines for New Members: Financial institutions or service providers planning to join the UPI 123Pay network must comply with these new guidelines before launching their services. This ensures that all providers meet standardized requirements and maintain high service quality.
6. Compliance Deadline: All UPI 123Pay members are required to update their systems and processes according to these new guidelines by January 1, 2025. Failure to comply by this deadline may lead to penalties or potential disruptions in UPI 123Pay services, affecting users’ access to digital transactions.

Significance of the RBI’s New Guidelines for Digital Financial Inclusion

The updated transaction limit and guidelines reflect RBI’s commitment to advancing digital financial inclusion for India’s feature phone users. With these changes, users in remote areas and those with limited access to digital infrastructure can now make larger transactions and enjoy a more secure, streamlined experience.

For feature phone users who may be new to digital transactions, UPI 123Pay serves as an accessible and reliable option, ensuring they can participate in the digital economy. Moreover, as financial institutions and service providers adopt these updates, the digital payments landscape in India is likely to see increased adoption and smoother transactions across all devices.

These comprehensive updates make UPI 123Pay an even more attractive and practical option for millions of feature phone users across India.

UPI: Transforming Mobile Payments in India

Unified Payments Interface (UPI) is a revolutionary framework that has reshaped the landscape of mobile payments in India since its launch in 2016. With its simple, fast, and secure payment process, UPI has become an essential tool for millions of users, enabling seamless money transfers and boosting the digital economy.

What is UPI?

UPI is a system designed to facilitate instant money transfers between bank accounts using a mobile platform. Unlike traditional methods, which often require complex account details and routing numbers, UPI streamlines transactions with the use of a simple Virtual Payment Address (VPA). The system is maintained and overseen by the National Payments Corporation of India (NPCI), which has established the software code and protocols that ensure its smooth operation.

UPI acts as the backbone for digital transactions, allowing banks and financial technology (fintech) companies to build their own consumer-facing applications. Apps like Google Pay, Paytm, and PhonePe, among others, utilize UPI as their underlying infrastructure. Even individual banks have integrated UPI into their mobile apps, offering their customers a straightforward way to make payments and transfers.

How UPI Works

To use UPI, users must first create a unique UPI ID within an app that supports the service. This ID is typically linked to the user’s mobile number and bank account. The registration process is secure and straightforward:

1. Download and Setup: Users download a UPI-enabled app and go through a simple registration process that verifies their mobile number and links their bank account.
2. Create a UPI ID: The user creates a VPA, such as “yourname@bank,” which serves as a unique payment identifier.
3. Secure PIN Setup: Users set a secure Personal Identification Number (PIN) for authorizing transactions.

When initiating a transaction, the user simply inputs the recipient’s UPI ID or mobile number, the amount to be transferred, and authorizes the payment using their PIN. This process triggers an immediate transfer of funds from the sender’s bank account to the recipient’s account, all happening in real-time.

Behind the Scenes: How the Money Flows

One of the key aspects of UPI’s architecture is its multi-layered approach to transferring money:

1. Initiation: The transaction starts when a user inputs the recipient’s details and approves the payment with their UPI PIN.
2. Routing: The request is routed through the UPI network, which acts as an intermediary to ensure the funds are moved securely and swiftly.
3. Fund Transfer: The money flows from the sender’s bank account to an intermediary current account maintained by the payment app. The app then transfers the money to the recipient’s bank account.
4. Confirmation: Both the sender and recipient receive instant notifications confirming the transaction status.

Benefits and Features of UPI

• 24/7 Availability: UPI operates around the clock, enabling transfers even on weekends and public holidays.
• No Charges: One of the most attractive features is that UPI transactions are typically free, which encourages widespread use.
• User-Friendly: With just a few steps, users can send or receive money without sharing sensitive banking details.
• Multiple Banks and Platforms: UPI supports various banks and can be accessed through different apps, giving users flexibility in choosing their preferred service.
• Interoperability: UPI allows seamless transactions between different banks and platforms, making it versatile and highly efficient.

UPI’s Growth and Adoption

UPI has seen rapid growth since its inception, driven by its ease of use and the significant push toward digital payments. As of now, more than 249 banks are part of the UPI network, processing over 3.5 billion transactions each month. The total value of transactions conducted through UPI has already surpassed those made using debit and credit cards combined.

The adoption of UPI has been fueled by its seamless integration with everyday financial activities. Consumers use UPI for everything from paying utility bills and splitting restaurant bills to online shopping and making small business payments. Merchants, too, have found UPI to be a game-changer, enabling them to receive payments without expensive point-of-sale (POS) systems or hefty transaction fees.

Impact on India’s Financial Landscape

UPI has significantly contributed to the push for a cashless economy in India. By reducing the reliance on cash and enhancing financial inclusion, UPI has brought millions of people into the digital economy who previously had limited access to financial services. This has had a profound impact on how people manage their finances, allowing them to transact more efficiently and securely.

In addition, UPI’s success has inspired other countries to consider similar payment frameworks to modernize their own banking and financial systems. The technology has set a benchmark for real-time, low-cost, and highly accessible payment solutions globally.

In recent years, the Unified Payments Interface (UPI) has transformed how people in India handle digital transactions, offering a fast, convenient, and secure payment solution. NRIs (Non-Resident Indians) can also benefit from this platform, making it easier to send money back home without the extra fees that often come with international transfers. Here’s a step-by-step guide on how NRIs can use UPI to make fee-free transactions to people in India.

What is UPI?

UPI (Unified Payments Interface) is a digital payment system developed by the National Payments Corporation of India (NPCI) that allows for real-time money transfers between bank accounts via a mobile app. This system operates without needing additional bank information, such as account numbers or IFSC codes, as users can make payments using a Virtual Payment Address (VPA), often their mobile number or a unique identifier.

Benefits of Using UPI for NRIs

• No Transfer Fees: Unlike most international money transfer services, UPI does not charge NRIs for transactions to people in India, making it highly cost-effective.
• Instant Transactions: UPI provides instant transfer capabilities, meaning money reaches recipients immediately, avoiding typical transfer delays.
• 24/7 Availability: UPI operates 24/7, allowing NRIs to send money at any time of day.
• Ease of Use: With simple setup and use, UPI is widely accepted across India, making it convenient for everyday transactions.

Requirements for NRIs to Use UPI

For NRIs to use UPI, they must meet a few requirements:

1. Indian Bank Account: NRIs need an active bank account with an Indian bank that supports UPI transactions.
2. Indian Mobile Number: A valid Indian mobile number is required and must be linked to the bank account.
3. UPI-Enabled App: NRIs can choose from several UPI-enabled apps, such as Google Pay, PhonePe, or Paytm.

Setting Up UPI for NRIs

1. Download a UPI App: Install a UPI-enabled app, like Google Pay or PhonePe, from the app store.
2. Register with Mobile Number: Register with your linked Indian mobile number.
3. Create a UPI ID: After verifying your number, create a unique UPI ID, which will serve as your payment address.
4. Link Bank Account: Link your Indian bank account to the app. The app will fetch details automatically for supported banks.

How to Make UPI Transactions

Once set up, NRIs can make payments or send money by entering the recipient’s UPI ID, scanning a QR code, or selecting the contact within the app. Payments are secure and processed in real-time.

Tips for Safe UPI Transactions

• Avoid Sharing UPI PIN: Your UPI PIN is for authorization; keep it private.
• Verify Recipient Details: Double-check the recipient’s UPI ID to ensure funds go to the correct person.
• Enable App Security: Enable two-factor authentication or fingerprint/face ID for an added security layer.

Conclusion

UPI offers a powerful, no-fee solution for NRIs to send money quickly and securely to people in India. With simple setup and ease of use, UPI is becoming the preferred choice for NRIs looking for a cost-effective way to handle financial transactions with family, friends, or businesses in India.