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.