India’s beloved UPI payment system has seen some major changes in January 2024, with even more exciting proposals for the future. Here’s a quick rundown of the 5 most important things you need to know
As we welcome 2024, India’s beloved UPI payment system sees not just fireworks, but a set of changes designed to enhance convenience, security, and its overall reach. While some modifications have already gone live on January 1st, others are exciting proposals brewing on the horizon. Buckle up, as we explore the 5 key UPI rule changes already in effect and peek into the potential future of your digital wallet:
1. Inactive IDs See the Exit Door
Dust off your rarely used UPI IDs, folks! In an effort to streamline the system, payment apps like Paytm and PhonePe will now deactivate UPI IDs that haven’t seen any action for a year. This aims to address dormant accounts and free up resources for active users.
2. Hospitals and Schools See a Transaction Limit Boost
Parents and patients, rejoice! The RBI has generously increased the UPI transaction limit for hospitals and educational institutions from ₹1 lakh to a whopping ₹5 lakh. This move facilitates smoother payments for larger bills and fees.
3. Auto-Payments Breeze Through Verification
Recurring bill payments just got smoother! UPI auto-payments for credit card bills, mutual funds, and insurance premiums up to ₹1 lakh will no longer require additional factor authentication (AFA). This translates to effortless, on-time bill settlements.
4. Tiny Transactions, Bigger Limits
Good news for small spenders! The NPCI has increased the transaction limit for UPI Lite wallets from ₹200 to ₹2,000. This caters to daily microtransactions and offers users with limited internet access a more convenient option.
5. Merchant Payments Get Charged (a little)
For transactions above ₹2,000 made using prepaid payment instruments like wallets, a 1.1% interchange fee will be levied. This fee helps merchants cover transaction costs and incentivizes wider adoption of UPI payments.
Here are some additional plans to make UPI payments more seamless:
- A 4-hour window for New Transactions: Feeling unsure about a new recipient? RBI proposes a 4-hour window for first payments exceeding ₹2,000 to new users. This gives you a chance to reverse or modify the transaction if needed.
- UPI for Secondary Market: This pilot program allows blocking funds post-trade confirmation and settling payments via Clearing Corporations. Imagine seamless transactions in securities trading!
- UPI ATM and Tap & Pay: Imagine withdrawing cash via QR code scanning at ATMs or paying simply by tapping your phone. These futuristic features are being explored by NPCI to further revolutionise payments.
