The Reserve Bank of India (RBI) raised the UPI Lite wallet limit from INR 2,000 to INR 5,000 in an effort to further boost the nation’s adoption of digital payments. On December 4, the central bank also declared that the offline transaction limit for the UPI Lite service would be raised from the existing INR 500 to INR 1,000 per transaction. The new restrictions will take effect right away.
RBI Amends its Framework
As a result of the RBI’s amendment to its framework for facilitating minor value digital payments in offline mode, the new changes were implemented. The framework stipulates, among other things, that a payment instrument may not exceed INR 2,000 in total at any given moment and that the maximum amount for offline digital payment transactions is INR 500. According to the notification, the offline framework has been modified, and the increased limitations for UPI Lite are INR 1,000 per transaction, with INR 5,000 being the maximum limit at any given time.
Launched in 2022, UPI Lite allows customers to conduct small-value transactions online without a PIN or internet connection. The solution allows offline debit for payments but only allows credits to be made once the user is online, avoiding the need for a bank’s basic banking systems in real-time. This comes a few months after the central bank announced plans to raise the UPI Lite transaction ceiling to INR 1,000 following the October meeting of its Monetary Policy Committee.
Next to Increase Per Transaction Limit of UPI123 Pay
Additionally, the RBI had stated that the existing INR 5,000 per transaction restriction for UPI123 Pay would be raised to INR 10,000. In an effort to increase the use of UPI payments throughout the nation, the RBI has been aggressively testing out new UPI products at the same time. RBI governor Shaktikanta Das introduced UPI Circle in August 2024, enabling users to connect with reliable secondary users on the UPI app for partial or complete payment delegation.
UPI Tap & Pay and Hello UPI!
UPI Tap & Pay, which allows users to make payments by tapping their phone on a contactless reader, and Hello UPI, a conversational UPI payment solution, were both introduced by the National Payments Corporation of India (NPCI) last year. Digital payments are still growing throughout the nation because of rising internet and smartphone usage.
In November 2024, UPI recorded INR 1,548 Cr transactions, a 38% increase over the INR 1,100 Cr transactions recorded during the same period last year. In the meantime, the value of transactions on the payments infrastructure increased from INR 17.4 Lakh Cr in November 2023 to INR 21.55 Lakh Cr last month, a 24% increase.
As of September 2024, 6.32 lakh cases of UPI payment scams totalling INR 485 crore had been registered nationwide, according to RBI data. In FY24, there were 13.42 lakh UPI fraud instances, involving around INR 1,087 crore, a significant increase from FY23’s INR 573 crore. In FY 2023-24, the RBI reported that ‘financial scams’ cost Indians INR 2,715 crore, with each case involving sums of INR 1 lakh or more. Pankaj Chaudhary, the Minister of State (MoS) for Finance, presented the information to the Lok Sabha on 25 November.
The amounts involved in fraud cases in commercial banks and all Indian financial institutions decreased in FY24 from FY23, when they stood at INR 3,607 crore, according to Reserve Bank of India (RBI) data on financial frauds based on the date of occurrence and the amount involved of INR 1 lakh and above in each case, MoS Chaudhary said. According to the minister, there has been a decrease in financial fraud during the last three years. In FY 2021–2022, there were financial scams of INR 9,298 crore.
Tamil Nadu Tops the List
With 6,468 financial fraud instances totalling INR 663.63 crore in FY24, Tamil Nadu recorded the most, followed by Maharashtra with INR 391.78 crore and Karnataka with INR 243.43 crore. The amount engaged in frauds has decreased over the years as a result of extensive measures implemented to prevent financial frauds and discourage scammers, Chaudhary stated.
According to the minister, the RBI released updated master directions on “fraud risk management” in commercial banks and All India Financial Institutions (AIFIs) in July 2024 after reviewing previous master directions, circulars, and new challenges. In addition to highlighting the necessity of establishing a strong internal audit and controls framework, these also mandate a framework on early warning signals and red flagging of accounts, strengthen the board’s role in governance and oversight of fraud risk management, and create a dedicated data analytics and market intelligence unit in banks.
Central Payment Fraud Information Registry (CPFIR)
According to the minister, the RBI has been using the Central Payment Fraud Information Registry (CPFIR), a web-based mechanism for reporting payment-related crimes, since March 2020 in an effort to stop frauds arising from UPI transactions. Payment-related scams must be reported to the aforementioned CPFIR by all regulated enterprises (RE).
The government and regulatory agencies have put in place measures like device binding, which links a customer’s mobile number to the device; two-factor authentication via PIN; a daily transaction cap; and restrictions on use cases, among others, to stop payment-related frauds, including UPI transaction frauds.
Swaminathan J, the deputy governor of the RBI, has urged banks to adhere to KYC regulations with “precision and empathy,” failing which the central bank will take regulatory action against them. Speaking on 18 November to a Conference of Directors of Private Sector Banks, the Deputy Governor also voiced worry that the Internal Ombudsman system and other customer grievance processes are frequently viewed as formalities rather than as strong, useful resources.
According to him, the Internal Ombudsman system should be more than just words on paper; it should function with the zeal and dedication required to settle disputes quickly and fairly. He suggested that bank boards should strive to create customer-focused institutions where all people, regardless of age, background, or income, feel appreciated and respected.
Focusing on Customer Centric Governance
Every policy, procedure, and point of contact with services should demonstrate customer-centric governance. He added that this is especially true when it comes to serving banks’ clients properly and openly.
“We are putting a lot of effort into improving customers’ trust in the system in this area, as I have stated previously, and we won’t think twice about taking action if a supervisory intervention is deemed required,” Swaminathan stated.
Additionally, the Deputy Governor urged bank board members, especially the chair of the Customer Service Committee, to make sure that KYC regulations are adhered to with accuracy and compassion. According to him, the Reserve Bank will not think twice about pursuing regulatory or supervisory measures against organisations that do not promptly and thoughtfully resolve these issues.
He added that although traditional governance duties like risk management and financial supervision would always be of utmost importance, boards must embrace technology, spearhead digital changes, embrace customer centricity, and guarantee moral leadership in the future.
AI-Enabled System to Prevent Financial Fraud
The RBI apparently sought to create an AI-enabled system earlier this year to notify people of financial wrongdoing in real time. Additionally, the regulator has requested banks and fintechs to let persons with disabilities (PwDs) use their point of sale (PoS) devices and other payment solutions. Following the announcement of the “Accessibility Standards and Guidelines for the Banking Sector” earlier this year by the finance ministry, the adjustments have been made.
The latest move is consistent with the RBI’s effort to increase the fintech industry’s accessibility for India’s general public. For example, the central bank said earlier this year that it will soon introduce a platform to provide small and rural enterprises with financing. The “Unified Lending Interface” platform will serve a wide range of unmet lending needs, especially for MSME and agricultural borrowers. In an effort to boost UPI use even more, the central bank raised the transaction limit for UPI123Pay and UPI Lite earlier this week.
As per the recent media reports, the Reserve Bank of India (RBI) is developing an AI-enabled system that will alert people in real time about financial scams.
An AI-based warning system would identify suspicious transactions as they are going to be made, and individual banks will access a central bank data repository that has information on different kinds of frauds and their offenders. In order to lower the danger of cyber fraud, the system will employ AI to gather and evaluate data on possible frauds, identify high-risk platforms, and alert users during transactions.
Even while cybercrime is still under control, the RBI believes that taking a proactive stance is essential to tackling new issues in the online financial sector. Indeed, MuleHunter AI, an artificial intelligence and machine learning (AI/ML) model, has already been created by the Reserve Bank of India Innovation Hub (RBIH), a division of the RBI, to assist banks and other financial institutions in identifying so-called mule accounts that fraudsters utilise. In contrast, the new system will protect digital transactions and notify users.
RBI Shaping the Cybercrime Fee Banking Services
To identify and stop cyber fraud, the RBI has been developing an AI-enabled fraud information system for some time. Implementing AI that can learn from previous frauds to flag high-risk transactions is one of the proposals made by an expert panel on cyber frauds that the RBI established.
The method seeks to increase banks’ and payment gateways’ readiness to identify possible fraud while making it more difficult to cash out illicit funds. The frequency and average magnitude of cyber frauds are increasing, despite the fact that current fraud rates are still modest at about one every 114,000 transactions. All of them, then, are a component of the strategies to raise public awareness in order to help stop victimisation.
In 2015, the central bank formed the Cyber Security and IT Examination (CSITE) cell under its Department of Banking Supervision, in addition to establishing several groups to combat cyber fraud. Additionally, it established a Fraud Monitoring Cell that publishes a list of bank and financial institution officials who are in charge of reporting fraud.
Making Guidelines More Stringent
Using information from the Indian Cybercrime Coordination Centre, a government agency tasked with combating cyber fraud, the central bank has also revised instructions for banks. The 2024 Deloitte-NASCIO Cybersecurity Study states that as the digital landscape grows and more personal, health, and financial data is available online, along with critical infrastructure like power, water, and transportation systems integrated with online components, cybersecurity is becoming a top priority for governments, regulators, and corporations. This increases vulnerabilities.
According to the research, which was published on September 30, governments and regulators are realising more and more how important strong information security is to the dependable running of important government services.The area of attack is expanding. Both the Internet of Things and the Internet itself are generating more information. The public’s financial, health, and other personal information is stored on more servers in more locations than ever before. According to the report, online operational components are connected with more important infrastructure.
It further stated that state officials are realising that information security is fundamental to the effective operation of vital government services and that all of this leads to an increase in the number of sites of risk.
Online Fraud Cases are Growing
The number of banking frauds rose by almost 300% in FY24 compared to the previous two years, according to the RBI’s May annual report. According to the data, public sector banks reported 75% of the total fraud amount in FY24, while private sector banks recorded 67% of the fraud incidents. According to the RBI statistics, the total number of online fraud cases rose by 708% to 29,082 in FY 23 and FY 24.
The Reserve Bank of India (RBI) has granted Cashfree Payments, a prominent player in the payments and API banking industry in India, a Prepaid Payment Instrument (PPI) licence.
The RBI has granted Cashfree Payments the Payment Aggregator (PA), Payment Aggregator-Cross Border (PA-CB), and Prepaid Payment Instrument (PPI) licenses, making it one of the first fintechs to attain these licenses. With the use of this licence, the firm will be able to offer improved digital payment options via prepaid instruments, making transactions between companies and their clients easier.
A new avenue for innovation in the payments industry is made possible by the PPI licence. The company’s goal has always been to give Indian businesses and its clients safe, adaptable, and effective payment experiences. According to Cashfree Payments CEO and cofounder Akash Sinha, the PPI license will assist Cashfree Payments in developing products that enable online companies to maintain and expand their customer base.
Cashfree Payments Expanding its Operations
In July, the business acquired a cross-border payment aggregator licence, allowing import and export transactions. It happened after the RBI gave it a payment aggregator licence in December 2023, enabling it to function in the online merchant payment market.
Cashfree Payments, which was founded in 2015 by Sinha and Reeju Datta, collects payments, pays vendors, disburses wages, reimburses expenses in bulk, and offers loyalty benefits to about 600,000 enterprises in India. The company handles transactions totalling approximately $80 billion yearly. Supported by investors including State Bank of India, Y Combinator, and Apis Partners, the business has also introduced products in eight additional nations, including the US, Canada, and the United Arab Emirates.
The National Payments Corporation of India certified Cashfree Payments earlier this month for its Unified Payments Interface Switch service, which enables it to interface directly with any bank’s core systems to provide its merchants with greater transaction success rates.
‘Piramal Pay’ Likewise Also Received RBI’s Nod
The Reserve Bank of India (RBI) has also granted permission to Piramal Payment Services Limited, a division of Piramal Capital & Housing Finance Ltd, to launch and run its “Piramal Pay” prepaid payment instrument (PPI) service.
The company emphasised that this authorisation, which was given in accordance with the Payment and Settlement Systems Act of 2007, is a major step towards providing millions of users throughout India with cutting-edge digital financial products. With this latest accreditation, Piramal Payment Services becomes one of the few RBI-approved Payment System Operators all geared up to improve the nation’s digital transaction environment.
The company further stated that “Piramal Pay” is intended to make financial transactions easy, safe, and convenient for both consumers and companies.
Navi Finserv, owned by Sachin Bansal, announced on 29 October 2024 that the Reserve Bank has permitted the company to make scheduled home loan disbursals that were approved before October 20. Navi Finserv had previously been prohibited from offering new loans.
Due to significant supervisory concerns, including unlawful pricing, the RBI had earlier this month ordered Navi Finserv to stop and refrain from approving and disbursing loans as of October 21 close of business.
Navi Finserv has been given permission by the Reserve Bank of India (RBI) to begin disbursing scheduled housing loans that were approved prior to October 20, 2024. According to the Bengaluru-based company’s press release, the authorisation is valid until December 31, 2024.
Relief to Home Buyers
Many homebuyers whose loans were approved before the RBI’s regulatory action and who are still awaiting their previously planned disbursements would find significant relief from the RBI’s approval.
In addition to Navi, the central bank had imposed the same limitations on three other NBFCs: Chennai-based Asirvad Micro Finance Limited, Kolkata-based Arohan Financial Services Limited, and New Delhi-based DMI Finance Private Limited.
Why RBI Imposed Restrictions on these NBFCs?
With effect from October 21st, the central bank said the action is based on significant supervisory concerns about these companies’ pricing policies, specifically their Weighted Average Lending Rate (WALR) and the interest spread charged over their cost of funds, which were determined to be excessive.
The Master Direction (MD) pertaining to the regulatory framework for microfinance loans and the MD relating to NBFC-scale based regulation also state that their pricing approach does not comply with the rules. According to an RBI statement, the pricing policy was also determined to be noncompliant with the guidelines established by the Reserve Bank’s Fair Practices Code.
These businesses are still able to provide services to their current clients and conduct collection and recovery procedures in compliance with current regulations, notwithstanding these business restrictions. DMI Finance Pvt Ltd and Navi Finserv Ltd are categorised as investment & credit firms within the NBFC sector, whereas Asirvad Micro Finance Ltd and Arohan Financial Services Ltd are categorised as mirofinance institutions.
In his most recent bi-monthly monetary policy statement, RBI Governor Shaktikanta Das pointed out that certain NBFCs were pursuing growth at a rapid pace without establishing risk management frameworks and sustainable business practices that were appropriate for the size and complexity of their portfolios.
He warned that a reckless “growth at any cost” strategy would be detrimental to their own well-being. Das also pointed out that some NBFCs, such as microfinance institutions (MFIs) and housing finance companies (HFCs), are pursuing excessive returns on their equity due to the substantial accretion of capital from both domestic and foreign sources, as well as occasionally pressure from their investors.
According to Governor Shaktikanta Das, the Reserve Bank of India (RBI) anticipates that the number of daily Unified Payments Interface (UPI) transactions will surpass one billion in the coming months from the current 500 million transactions per day.
Das stated during a panel discussion at the Group of Thirty’s Annual International Banking Seminar in Washington, DC, on October 26, 2024, that the RBI will not make a hasty announcement about a nationwide rollout of the central bank of digital currency (CBDC) because it wants to carry out extensive testing and be completely certain about its design, robustness, and security before thinking about a wider rollout.
The payments system is now much more efficient thanks to UPI. Approximately 500 million transactions are made over UPI every day. “We are trying to step it up further and the idea is to reach a billion transactions, may be in the next few months,” Das stated.
What National Payments Corporation of India’s Data Reveals?
According to data from the National Payments Corporation of India, the average number of transactions per day increased from 483 million in August to above 500 million in September. UPI handled 15.04 billion transactions in September 2024, totalling INR 20.64 lakh crore.
The RBI is working to integrate UPI with more nations’ payment systems. In fact, UPI has a lot of potential for international payments. According to Das, the RBI has also taken the initiative to connect India’s UPI with other nations’ quick payment systems.
Seven Countries Using UPI For Transactions
Seven nations presently provide UPI: France, the United Arab Emirates, Singapore, Bhutan, Sri Lanka, Mauritius, and Nepal.
Regarding the e-rupee, the governor stated that the RBI will implement the CBDC nationwide in a phased manner. Cross-border payments represent the CBDC’s greatest potential. Through the removal of numerous middlemen, CBDC can enable quick, easy, and inexpensive cross-border money transactions.
On November 1, 2022, the RBI began the first CBDC trial phase for wholesale transactions of government securities. A month later, on December 1, the RBI began the pilot for retail transactions.
Current Performance of UPI in India
PhonePe is the most popular UPI app in terms of volume and value contribution, followed by Google Pay and Paytm. However, according to a report by payment technology service provider Worldline, the average ticket size (ATS) of UPI transactions decreased by 8%. According to the report, the average ticket size (ATS) for all UPI transactions was INR 1,603 in the first half of 2023 and fell to INR 1,478 in the first half of 2024.
P2P (person-to-person) and P2M (person-to-merchant) transactions make up ATS. In P2P transactions, ATS saw an almost constant increase from INR 2,812 to INR 2,836 year over year. The amount of ATS for P2M transactions decreased by 4%, from INR 667 to INR 643.
With all necessary shareholder and regulatory permissions, the fintech firm Slice, based in Bengaluru, has successfully merged with North East Small Finance Bank (NESFB) as of October 27. Slice stated in a letter released on 28th October 2024 that the merger will combine the two companies’ activities, assets, and brand identities into a single banking organisation.
In addition to growing operations, strengthening risk management frameworks, and increasing customer experience, the business said in a statement that the combination will contribute to the development of a technology-driven bank.
Merger Aims at Expanding Footprints in the North East Region
The newly formed organisation will concentrate on regional economic development and expand its footprint in the country’s northeast region.
To make this merger a reality, the teams at Slice and NESFB have been working nonstop for more than a year. The chief executive officer of Slice, Rajan Bajaj, expressed gratitude to the regulatory bodies, particularly the RBI and the Government of Assam, for entrusting the company with this revolutionary journey. He noted that the merger is particularly dedicated to fortifying its ties in the Northeast and working to increase the number of persons enrolled in the official banking system.
In October 2023, Slice was given the go-ahead by the Reserve Bank of India to combine with the struggling NESFB. The Competition Commission of India and the National Company Law Tribunal also gave their consent later.
How Merger Will Help Both the Entities?
Slice noted that the merger will make it possible for the amalgamated business to make use of cutting-edge technology and profound community awareness, which will ultimately lead to increased financial inclusion across the country. Customers may anticipate an increased selection of products, improved omnichannel offers, and a banking experience that is more streamlined.
The scheme of arrangement and amalgamation that involves Garagepreneurs Internet Private Limited, Quadrillion Finance Private Limited, Intergalactory Foundry Private Limited, RGVN (North East) Microfinance Limited, and North East Small Finance Bank Limited has been approved by the National Company Law Tribunal (NCLT).
Slice’s Financial Report Card
The most recent valuation of Slice was above $1.5 billion, which occurred at the Series C round in November 2021. To date, Slice has raised a total of $340 million. According to the data intelligence platform TheKredible, Rajan Bajaj, who held the position of CEO and co-founder of the company, owned 8.21% of the ownership.
While Slice’s losses increased by 59.8% to a total of INR 406 crore, the company’s revenue increased by a factor of three, reaching INR 843 crore in the fiscal year 2023. The Bengaluru-based company was able to scale during the fiscal year 23, despite the disruption it experienced as a result of the Reserve Bank of India’s change in rules for card issuers. It has not yet submitted its annual financial reports for the fiscal year 2024.
On 21 October 2024, PB Fintech announced that its wholly-owned subsidiary, PB Financial Account Aggregators Private Ltd, had received a “Certificate of Registration” (CoR) from the Reserve Bank of India (RBI) to begin operating as an “Account Aggregator.” Subject to the RBI-mandated restrictions outlined in the CoR, the Wholly Owned Subsidiary may operate as a non-banking financial institution without taking deposits from the general public.
In a filing with the stock exchanges, PB Fintech stated that PB Financial Account Aggregators Private Ltd is now qualified to operate as an account aggregator following the CoR approval. The CoR will go into effect on October 18, 2024.
Managing Body
Policybazaar, an insurance aggregator, and Paisabazaar, a credit marketplace, are both operated by PB Fintech, the primary entity. In January 2023, the RBI gave PB Financial Account Aggregators in-principle authority to launch their account aggregation service. PB Fintech established a fully-owned subsidiary, PB Financial Account Aggregators, in February 2022 and submitted an application to the RBI to get a “CoR” as an NBFC-AA. Debit cards, credit cards, cardless EMIs, UPIs, bank transfers, e-wallets, and e-mandates are just a few of the payment options that payment aggregators allow their clients to accept.
For the quarter ending June 30, 2024, PB Fintech recorded a consolidated net profit of INR 59.98 crore, compared to a net loss of INR 11.90 crore for the same period in the previous fiscal year. For the third consecutive quarter, the business turned a profit and stayed in the black in the June 2024 quarter. PB Fintech declared a net profit of INR 60.19 crore for the March 2024 quarter. In the quarter ending December 2023, PB Fintech reported a net profit of INR 37.2 crore.
Current Account Aggregator Scenario in India
With the accreditation, PB Fintech becomes an NBFC-AA, joining the ranks of companies like Perfios, Setu, and DigiO.
One component of the India Stack is the account aggregator framework. Its goal is to make it possible for a system of financial data exchange to send client information securely and with their express agreement. Customers can choose how their financial information is shared by voluntarily registering with an AA.
94 financial institutions have implemented the account aggregator framework as both Financial Information Provider (FIP) and Financial Information User (FIU) as of June 30, 2024. 353 financial institutions have launched as FIU, whilst 60 financial institutions have launched as FIP.
PB Fintech received its NBFC-AA certification while simultaneously attempting to enter the payment aggregation market. The business founded PB Pay earlier this year, and in March 2024, it submitted an application for a payment aggregator licence.
In addition to this, PB Fintech wants to expand beyond its core financial services industry. Yashish Dahiya, the group CEO of PB Fintech, stated last month that the company is thinking of investing $100 million all at once to enter the healthcare industry. After receiving board approval, the corporation will use the investment to purchase a 30% share in a new healthcare business.
On September 9, 2024, the Reserve Bank of India amended the Unified Payment Interface (UPI) limitations, which were previously set at INR 2,000 and now stand at INR 5,000.
The Reserve Bank of India’s governor, Shaktikanta Das, announced that the Monetary Policy Committee (MPC) had decided not to alter the repo rate and that instead, the central bank would be raising specific restrictions for different types of transactions. “We have decided to increase the UPI lite wallet limit from INR 2,000 to INR 5,000 and the per transaction limit from INR 100 to INR 500.” “We have decided to increase the per transaction limit in UPI123Pay from INR 5,000 to INR 10,000,” Das added. According to Das, the action is intended to promote the broader use of UPI and improve its accessibility and convenience.
Appreciating this move, Kaushik Chatterjee, Founder & CEO of Unifinz Capital India Limited, stated, “The RBI’s decision to enhance UPI limits will encourage users to use it more frequently and make it more inclusive. Borrowers who were restricted by the transaction limit of UPI will now be able to pay higher loan instalments up to INR 10,000 through the UPI. At Lending Plate, where our customers are more comfortable making payments through UPI, this move will be a blessing for them. The increase in UPI limits shall boost the recovery efficiencies of every lending nonbank and, more significantly, the digital lenders whose loan size is smaller and so their loan instalments. Moreover, borrowers, by paying more promptly because the payment option now becomes more friendly with this move, will see their credit history improving, and that will have a positive bearing on the overall lending ecosystem.”
Similar thoughts were shared by Vikkas Goyal, Founder of Rupee 112; he said, “The RBI’s decision to increase the UPI Lite wallet limit and raise the transaction cap for UPI 123Pay represents a transformative step toward greater financial inclusion. For fintech platforms like us, this move enhances our ability to offer seamless and secure loan disbursement to salaried professionals across India. By leveraging UPI, we can streamline the loan disbursement process, making access to emergency loans faster and more efficient. The emphasis on strengthening cybersecurity is timely, and as we continue to expand, safeguarding customer data will remain a core priority for us.”
“The UPI transaction limit hike is a game-changer for digital lenders, especially those like Bharatloan that focus on bridging financial gaps for the underserved. This development enhances our ability to offer seamless, paperless loan disbursement and collection processes for our customers, allowing them to manage their financial needs with greater ease. While the RBI has rightly raised concerns around underwriting practices, we are committed to continually improving our risk management protocols to ensure responsible lending as we scale. We welcome these progressive changes that will support both growth and stability in the digital finance space,” opined Amit Bansal, Founder of Bharatloan.
For People Using Non-Smart Phone/Feature Phones
The revision of the UPI limit for UPI123 Pay is beneficial to those who use feature phones or non-smart phones. The RBI has raised the current payout threshold for this category to INR 10,000. People who want to use UPI for digital payments but don’t have internet access generally use this function. In order to use this service, customers must enter their 4- to 6-digit transaction pins.
With UPI123 Pay, users with feature phones (i.e., non-smartphones) can quickly and easily make payments utilising the Unified Payments Interface (UPI) payment service without needing to access the internet. The goal of this service is to reach the 400 million feature phone users in the nation while being more inclusive. In addition to using Dual Tone Multi-Frequency (DTMF) signalling technology and adhering to the UPI two-factor authentication protocol for transactions, the service also requires an account number and phone number.
Users will need to set up a UPI ID on their feature phone in order to utilise the UPI123PAY service.
Step 1: Enter *99# and select the name of your bank.
Step 2: Enter your debit card’s last six numbers as well as the number of expiration.
Step 3: Following this, you’ll be prompted to create a UPI pin.
Step 4: The UPI ID will be activated after your UPI pin has been set.
Enhancing the Usage of UPI Lite Wallet
With their UPI Lite wallets, users may now make payments up to INR 5,000. Previously, the limit stood at INR 2,000. Similar to a digital wallet on your smartphone, UPI Lite caters to small-scale transactions. This payment mechanism operates without the need for the primary banking infrastructure. Users can store a balance limit (INR2,000 earlier) with UPI Lite. Customers can use this updated balance of INR 5,000 for low-value transactions. The RBI increased the per-transaction limit for this mechanism from INR 100 to INR 500.
You can replenish the wallet’s balance when it runs out by using the associated bank account. Das stated that the MPC has chosen to maintain the repo rate at 6.50% for the 10th consecutive time during the announcement. People often accept that repo rates represent interest rates on loans to commercial banks.
“The move will enhance the customer experience by allowing larger value transactions with lower failure rates. In addition, this will reduce the strain on the payment gateways and servers as more transactions will be conducted using the UPI Lite – a system which does not require a two-factor authentication. From a technical standpoint, this offers tremendous benefits as it minimizes downtime risks because less frequent database hits for authentication and processing will lead to greater stability of the system. It also creates opportunities for FinTech businesses to optimize backend infrastructure to support a larger number of transactions at minimum additional cost. The business will also have to spend less on server and bandwidth-associated costs improving the green footprint of the company,” stated Dipal Dutta, CEO and founder- RedoQ.
Nitin Konde
