Improvement in payment system by RBI

To encourage wider adoption of Unified Payment Interface (UPI), the Reserve Bank of India (RBI) has announced an increase in the transaction limit on UPI 123 and UPI Lite.

What is UPI 123:

• UPI 123 was launched in March 2022 to enable feature-phone users to use UPI.
  • Currently it is available in 12 languages.
• UPI 123PAY is an instant payment system for feature phone users who can use the UPI payment service in a secure manner.
• Through UPI 123PAY, feature phone users will now be able to do a variety of transactions based on four technology options. These include:
  • UPI payments through pre-defined IVR numbers
  • Missed call pay
  • Feature phones where payment functionality is implemented by the original equipment manufacturer.
  • Near sound based technology and voice based payments
• Till now the per-transaction limit in UPI 123PAY was limited to ₹5,000. To promote its usage, RBI has increased the per transaction limit to ₹10,000 in consultation with stakeholders.

About UPI Lite:

• UPI LITE is a new payment solution that leverages the trusted NPCI Common Library (CL) application to process transactions of value less than Rs 500.
• The solution follows the existing UPI ecosystem protocols for mobile phones with an aim to ensure parity, compliance and system acceptance.
• UPI LITE aims to adopt a customer-friendly approach to enable low value transactions.
  • It provides substantial risk mitigation without using the bank's core banking system in real-time.
• RBI also decided to increase the limit per transaction through UPI Lite from ₹500 to ₹1,000 and the total limit of UPI Lite wallet from ₹2,000 to ₹5,000.