Starting January 1, 2025, the Reserve Bank of India (RBI) will implement new regulations for UPI (Unified Payments Interface) transactions, marking a significant milestone in the evolution of digital payments in India. With enhanced transaction limits and expanded features, these updates aim to further strengthen UPI’s role as the backbone of India’s digital economy. Here’s what’s changing and how it impacts users and platforms like Google Pay, PhonePe, and Paytm.
UPI123Pay: Doubling Transaction Limits for Feature Phones
One of the most notable changes is the increase in transaction limits for UPI123Pay, a service designed specifically for feature phone users. Currently, UPI123Pay allows transactions of up to Rs 5,000 per day, but starting January 1, this limit will double to Rs 10,000 per day.
This enhancement underscores the RBI’s commitment to promoting financial inclusion, enabling millions of feature phone users to participate in the digital payment ecosystem.
Impact of UPI123Pay Updates
- Broader Access: More users in rural and semi-urban areas can make higher-value transactions without smartphones.
- Convenience: The higher limit caters to users relying on feature phones for daily financial activities.
UPI Transaction Limits for Smartphones
For smartphone users, the current daily transaction limit of Rs 1 lakh remains unchanged for most cases. However, in exceptional circumstances like medical emergencies, this limit has been raised to Rs 5 lakh, providing users with greater flexibility during critical times.
UPI Circle: Expanding to More Platforms
The innovative UPI Circle feature, currently available exclusively on the BHIM app, will roll out to other UPI platforms in 2025. This feature allows users to add family members or friends as secondary users for delegated payments.
How UPI Circle Works
- Secondary User Payments: Delegated users can make payments without needing a bank account.
- Primary User Control: The primary user must approve each transaction or set a predefined spending limit for secondary users.
This expansion will significantly improve convenience for shared expenses and family financial management, aligning UPI further with user needs.
UPI’s Stellar Performance in 2024
The Ministry of Finance recently reported 15,537 crore UPI transactions from January to November 2024, with a staggering total transaction value of Rs 223 lakh crore. These figures underscore UPI’s dominance in the digital payment space and its growing role in India’s economy.
What It Means for Users and Platforms
Platforms like Google Pay, PhonePe, and Paytm have lauded these changes, which align with their mission to enhance user convenience and adoption of digital payments. The increased limits and expanded features not only make UPI more versatile but also encourage greater adoption across demographics.