Daijiworld Media Network - New Delhi/Mumbai (SS)
New Delhi/Mumbai, Nov 1: In a festive boost for digital payments, the Reserve Bank of India (RBI) has announced significant increases in transaction limits for UPI 123Pay and UPI Lite, aiming to enhance user convenience during Deepavali.
The cap for UPI 123Pay transactions has risen from Rs 5,000 to ?10,000, while UPI Lite users will see their limit grow from Rs 2,000 to Rs 5,000, with individual transaction caps now set at Rs 1,000.
Key changes:
UPI 123Pay: New limit of ?10,000.
UPI Lite Wallet: Increased limit of Rs 5,000, facilitating low-value transactions.
RBI Governor Shaktikanta Das emphasised that these adjustments are designed to encourage wider adoption of digital payments and reduce reliance on cash, especially during the festive season.
Experts anticipate that the higher limits will boost high-value transactions while the enhanced UPI Lite will support more low-value offline transactions, improving the overall user experience.
Understanding UPI services
UPI 123Pay: Tailored for users of basic phones, this service allows UPI transactions without a smartphone or internet. Users can initiate payments by dialing *99# and following prompts.
UPI Lite Wallet: A simplified wallet service that supports quick, low-value transactions, even offline, promoting the use of digital payments for everyday purchases.
Future aspirations
In addition to these changes, the RBI has set an ambitious goal to ramp up daily UPI transactions from the current 500 million to a staggering 1 billion.
Speaking at the Annual International Banking Seminar in Washington, Governor Das praised UPI for revolutionising payment processes for millions in India. Recent data indicates that in September 2024, UPI processed an impressive 15.04 billion transactions, totalling Rs 20.64 lac crore.
Expanding UPI internationally: Currently, UPI operates in seven countries, including Sri Lanka, UAE, and Singapore, with plans to connect with additional payment systems to facilitate cross-border transactions.
Cautious approach to CBDC
While focusing on UPI enhancements, the RBI is also progressing cautiously with its Central Bank Digital Currency (CBDC), known as the e-rupee. Governor Das highlighted the necessity of extensive testing to ensure security and reliability before a national launch. The phased pilot testing for the CBDC began in late 2022, covering both retail and wholesale transactions.
With these initiatives, the RBI aims to significantly enhance India’s digital payment landscape, ensuring efficient financial transactions both domestically and internationally, particularly during the festive season.