On October 9, the Reserve Bank of India (RBI) announced an increase in the transaction limit for UPI 123Pay, raising it from ₹5,000 to ₹10,000. Alongside this, significant updates were introduced for UPI Lite wallets. The National Payments Corporation of India (NPCI) has issued guidelines for banks and service providers to comply with these changes.
What is UPI 123Pay?
UPI 123Pay is a digital payment solution designed for feature phones, allowing users to perform UPI transactions without needing internet access. It supports four payment methods:
- Interactive Voice Response (IVR) numbers
- Missed call-based transactions
- Apps embedded in feature phones by OEMs (Original Equipment Manufacturers)
- Proximity sound-based payments
This innovation promotes financial inclusion by enabling digital payments for users without smartphones or internet connectivity.
UPI Lite Wallet Updates
In addition to changes in UPI 123Pay, the RBI introduced updates for UPI Lite wallets:
- Wallet balance limit: Increased from ₹2,000 to ₹5,000.
- Per-transaction limit: Raised from ₹500 to ₹1,000.
Implementation Timeline for UPI 123Pay Changes
While the revised transaction limit for UPI 123Pay is effective immediately, the NPCI has set January 1, 2025, as the deadline for implementing additional updates.
Key Changes to Be Implemented by January 1, 2025
- Increased Transaction Limit
The transaction limit for UPI 123Pay will officially rise from ₹5,000 to ₹10,000. - Aadhaar OTP Onboarding
Aadhaar-based OTP will become mandatory for onboarding users, ensuring enhanced security and streamlined authentication. - Transaction Tagging
- Introduction of a new purpose code (86) for UPI 123Pay transactions.
- All financial and non-financial transactions must include this code in the
purposetag. - The previous initiation mode (31) will be deprecated.
- UPI Numeric ID Mapper Integration
Banks and service providers must integrate with the UPI Numeric ID Mapper to enable functionality for UPI numbers, simplifying transaction processes.
Why These Changes Matter
RBI Governor Shaktikanta Das emphasized UPI’s transformative impact on India’s financial ecosystem, enhancing accessibility and inclusivity in digital payments. These updates aim to foster innovation, expand adoption of UPI-based solutions, and ensure the system meets the evolving needs of users across diverse segments.