UPI Rules Changing from Nov 3: Big Impact for PhonePe, GPay, Paytm Users — What You Must Know

New settlement cycles have been announced by the National Payment Corporation of India. Recently, the new UPI (Unified Payments Interface) cycles for both authorised and contested transactions were revealed. For RTGS customers, who previously had to exercise caution when transacting, the revisions are welcome news.

Currently, UPI uses RTGS to perform 10 settlement cycles every day, each of which consists of both authorised and contested settlements. In order to expedite the daily settlement process, it has been determined to separate approved and disputed settlements in light of the notable increase in transaction volume.

New Rules Framed by NPCI

First off, only permitted transactions will now be included in the settlement cycles between 1 and 10. As a result, these cycles will not process any disputes. The current cut-over times and RTGS posting schedules won’t be altered. Second, as indicated in the above table, settlements pertaining to disputes will be conducted twice a day during settlement cycles 11 and 12.

 Only disputed transactions will be included in these cycles. The identifiers DC1 and DC2, where DC stands for dispute cycle, will be incorporated into the NTSL file naming scheme.

Thirdly, three other settlement regulations, such as GST reports, reconciliation reports, and settlement timeframes, remain unaltered. The deadline for terminating any autopay mandates associated with the former @paytm UPI ID handles has also been extended by NPCI by two months, until October 31, 2025.

How it will Impact Users and Banks?

The majority of users will continue to have the same experience while paying in physical stores, online, or via peer-to-peer transfers. Since they won’t be in competition with refund settlements within the same batch, these transactions should actually appear in banks’ systems more quickly.

Reconciliation processes will be less congested, which will be advantageous to banks. The new structure is intended to decrease the possibility of settlement delays, enhance operational efficiency, and reduce bottlenecks by separating disputes from ordinary transactions. UPI volumes are at all-time highs at the moment of the revamp.

According to NPCI data, UPI processed payments totalling INR 24.85 trillion in August, marking the first time it has surpassed the 20 billion monthly transaction milestone. Since digital payments are now the foundation of India’s financial system, it is anticipated that the more precise settlement structure will improve customer satisfaction and increase bank operating stability.