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Business News/ Money / Personal Finance/  UPI users alert! Five new rules related to Unified Payments Interface you must know
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UPI users alert! Five new rules related to Unified Payments Interface you must know

The transaction limit for UPI payments has been raised from ₹1 lakh to ₹5 lakh, encouraging the adoption of the system for transactions involving hospitals and educational institutions

UPI has been instrumental in driving the digital payments revolution in India,Premium
UPI has been instrumental in driving the digital payments revolution in India,

Unified Payments Interface (UPI) has been instrumental in driving the digital payments revolution in India. The new year brings enhanced convenience, financial inclusivity, and secured transactions for Indian consumers, powered by UPI. “In 2024, UPI will continue to grow at about 60% in terms of volume above 2023 UPI transactions; P2M will continue to trend higher than that of P2P transactions; P2M will be about 60% of the total UPI volume," said Mehul Mistry, Global Head-Strategy, Digital Financial Services & Partnerships, Wibmo, A PayU Company.

It's essential to take note of the UPI rules that have been changed. 

1) UPI transaction limit for hospitals, educational institutions payments raised

High-value payments for critical sectors will get easier as the transaction limit for hospitals and education-related payments is raised to 5 lakh. 

“To further enhance the utility of UPI, the central bank has raised the transaction limit for UPI payments from 1 lakh to 5 lakh, specifically encouraging the adoption of UPI for transactions involving hospitals and educational institutions," said Mehul Mistry, Global Head-Strategy, Digital Financial Services & Partnerships, Wibmo, A PayU Company.

Overall, the higher UPI limit for these specific sectors will benefit both last-mile consumers and merchants by facilitating high-value real-time payments and instant settlements.

2) Pre-sanctioned Credit Line on UPI

According to Amit Kumar, Chief Technology Officer, Easebuzz, pre-sanctioned Credit Line on UPI will bring the availability of loans to individuals and businesses, furthering financial inclusion in the country. 

3) UPI for secondary market

Simultaneously, the National Payments Corporation of India (NPCI) has introduced 'UPI for Secondary Market,' currently in its Beta phase, allowing limited pilot customers to block funds post-trade confirmation and settle payments on a T1 basis through Clearing Corporations.

“UPI for the secondary market initiative will help in a more streamlined and efficient investing environment. Trading settlements will become faster as it works on the single-block-multiple-debit facility and gives full control and brings transparency for customers," said Amit Kumar, Chief Technology Officer, Easebuzz.

4) UPI ATMs using QR codes

UPI ATMs using QR codes, which are currently in the pilot phase, will empower cash withdrawals without the need to carry physical debit cards and will bring better convenience and financial inclusion. 

“Additionally, a notable shift in the UPI landscape includes the introduction of cash withdrawals at ATMs by scanning UPI QR codes, a move expected to reduce reliance on traditional debit cards for cash withdrawals," said Mehul Mistry.

5) Four-hour cooling period

The Reserve Bank of India (RBI) has proposed a four-hour cooling period for users initiating first payments exceeding 2,000 to new recipients, enhancing the safety of UPI transactions by allowing users to reverse or modify transactions within this designated timeframe.

"These measures collectively aim to streamline and secure UPI transactions in the evolving digital payment landscape," said Mehul Mistry.

In 2023, UPI's integration with credit systems was a major step towards financial inclusion. This move made credit more accessible and easier to manage through UPI.

Single-block-and-multiple-debits

The introduction of new features, like single-block-and-multiple-debits, is particularly exciting. According to Kunal Varma, CEO of Freo, this feature simplifies transactions for customers who can now authorise multiple payments, such as monthly subscriptions or EMIs, with a single mandate. It's like setting up a one-time instruction for recurring payments, be it for your Netflix subscription or your monthly mobile plan, making life much easier.

UPI services to feature phones

Another groundbreaking development is the extension of UPI services to feature phones, vastly increasing financial inclusion. Imagine a small vendor in a rural area seamlessly accepting digital payments without needing a smartphone - that's inclusivity in action. 

Deactivate inactive UPI IDs

The NPCI has instructed payment apps to deactivate inactive UPI IDs after one year. Users of platforms like Google Pay and PhonePe must verify and ensure their UPI IDs remain active, also reviewing associated phone numbers for inactivity.

“In a series of recent developments, the National Payments Corporation of India has issued directives to banks and Third Party App Providers (TPAPs) to deactivate inactive UPI IDs that have remained dormant for over a year, starting from January 1, 2024," said Mehul Mistry.

Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

 

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ABOUT THE AUTHOR
Sangeeta Ojha
A business media enthusiast. Writes on personal finance, business and banking.
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Published: 13 Jan 2024, 06:13 AM IST
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