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The Reserve Bank of India (RBI) has implemented significant enhancements to the Unified Payments Interface (UPI) system, aimed at simplifying financial transactions and improving user experience. These updates encompass an increase in transaction limits and the expansion of UPI circles, which, according to the RBI, will provide considerable benefits to millions of users.
Whether you’re a user of popular applications like Google Pay, PhonePe, or Paytm, or even if you rely on a feature phone, these new upgrades can greatly enhance your transaction capabilities and overall experience.
One of the most important developments is the elevated transaction limit for feature phone users utilizing UPI123Pay. Previously capped at Rs 5,000, the limit has now been raised to Rs 10,000, enabling feature phone users to execute more significant transactions with ease. This new limit is essential for enhancing the financial capabilities of users who may not have access to smartphone applications.
It is crucial to note that this enhanced limit is exclusive to UPI123Pay. For users of well-known smartphone UPI apps such as PhonePe, Paytm, and Google Pay, the daily transaction ceiling remains set at Rs 1 lakh. However, the RBI has introduced an exception for emergencies, allowing users to transact up to Rs 5 lakh in critical situations, ensuring that users have prompt access to funds when they need them most.
In addition to the increase in transaction limits, the UPI Circle feature has undergone a significant overhaul. Initially limited to users of the BHIM app, the UPI Circle function will now be available on more platforms, including PhonePe, Paytm, and Google Pay. This feature allows users to create a shared payment circle comprising family members or friends, enabling delegated payments.
This functionality is particularly advantageous for parents who wish to offer their children a degree of financial independence without the necessity of opening bank accounts. Parents can set specific limits for their children or require their approval for transactions, providing a controlled environment for young users to engage in financial activities.
The growth of UPI has been remarkable throughout 2024, as evidenced by data from the Ministry of Finance reporting a staggering 15,537 crore transactions from January to November 2024. The cumulative transaction value reached a monumental Rs 223 lakh crore. The recent changes are expected to encourage even more users to engage in daily transactions, streamlining the payment process and benefiting users at all levels.
To sum it up, these enhancements to the UPI system by the RBI represent a concerted effort to make digital transactions more accessible and user-friendly. By raising transaction limits for both UPI123Pay users and smartphone app users while expanding the functionality of the UPI Circle, the RBI is positioning UPI as an even more robust platform for financial transactions. With these developments, millions of users across India can now enjoy a more flexible and comprehensive digital payment experience.
