RBI Increases Transaction Limits for UPI Lite and UPI 123Pay: Here’s What It Means for Users

RBI Increases Transaction Limits for UPI Lite and UPI 123Pay: RBI increases UPI 123Pay and UPI Lite transaction limits. UPI 123Pay per transaction limit increased to ₹10000 from ₹5000. UPI Lite wallet limit increased to ₹5000 from ₹2000. UPI Lite per transaction limit increased to ₹500 from ₹100. To make digital payments more useful for feature phone users and convenient for UPI Lite wallet users for small transactions.

Launched in March 2022 by RBI and NPCI, UPI 123Pay is for 400 million feature phone users of India. It allows users to make UPI payments without smartphone or internet. Digital payments made more accessible to a larger population.

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UPI has changed the financial landscape of India by making digital payments more accessible and inclusive through innovations. To promote UPI adoption two key changes announced: (i) UPI123Pay per transaction limit will be increased to ₹10000 from ₹5000 and (ii) UPI Lite wallet limit will be increased to ₹5000 from ₹2000 and per transaction limit will be increased to ₹1000 from ₹500, said Governor Shaktikanta Das.

"UPI 123Pay is tailored for India's 400 million feature phone users, enabling them to make digital payments without needing a smartphone or internet connection. Users can set up UPI 123Pay by dialing *99#, selecting their bank, entering debit card details, and creating a UPI PIN, ensuring secure transactions even without internet access," explained Mehul Mistry, Global Head of Strategy, Digital Financial Services & Partnerships.

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Industry sees this as a big step for financial inclusion and digital payments in India. Siddharth Maurya, Founder and MD of Vibhavangal Anukulakara Private Limited said this is in response to diverse user segments. Raghunandan Saraf, Founder and CEO of Saraf Furniture said these new limits will allow feature phone users to do higher value transactions, UPI 123Pay will use 4 technology options to support this growth.

Saraf expects these new limits will lead to more higher value transactions and less cash usage. UPI Lite wallet with limit of ₹5000 and transaction limit of ₹1000 will promote more low value offline digital transactions.

"Additionally, a Beneficiary Account Name Look-up Facility will be introduced. Currently, UPI and Immediate Payment Service (IMPS) allow users to verify the recipient's name before making a payment. This feature will now be extended to the Real Time Gross Settlement System (RTGS) and the National Electronic Funds Transfer (NEFT) system, enabling remitters to confirm the account holder's name before transferring funds. This enhancement aims to minimize errors and reduce the risk of fraud," RBI Governor said.

He said UPI Lite allows users to store money directly on their device, making payments simpler and no need to hit bank server for each transaction.

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