RBI enhances transaction limits on UPI 123 and UPI Lite

To encourage wider adoption of the Unified Payments Interface (UPI), the RBI announced an increase in transaction limits on UPI123 and UPI Lite.

Table of Contents

About Unified Payment Interface (UPI)

UPI Instant payment system developed by the NPCI, It is built over the IMPS infrastructure
The different channels for transferring funds using UPI are:
- Send/Collect through Virtual ID
- Account Number + IFSC
- Aadhaar Number
Single mobile application for accessing different bank accounts.
Transactions are carried out through mobile devices with two-factor authentication using device binding and a UPI PIN as security.

Did You Know

RBI has recently introduced ‘Delegated Payments’ through UPI.
This will enable a secondary user, like a spouse, to make payments via UPI by using the bank account of the primary user.
It would enable a UPI user to set a payment limit for another user on their bank account.
This product is expected to add to the reach of digital payments.

Developed by: National PaymentsCorporation of India (NPCI)
Works on both feature phones and Smartphones (without Internet).
Transaction Methods:
- IVR (Interactive Voice Response): Users can call a predefined number and follow voice prompts to complete transactions.
- Missed Call Approach: Users give a missed call and receive a callback to authenticate the transaction using a UPI PIN.
- App-based Functionality: A simplified UPI app for feature phones offering basic payment functions.
- Proximity Sound-based Payments: Users tap their phone on a merchant device, utilising sound waves for contactless payments.
Transaction Limit: Increased from ₹5,000 to ₹10,000 per transaction to enhance usability.

It is designed for small-value transactions.
It enables quick payments (no need to connect to a bank server for each transaction).
Wallet Limits: The wallet limit has been raised from ₹2,000 to ₹5,000, with a per-transaction limit of ₹1,000 (previously 500).