Unified Payments Interface (UPI 123Pay) is transforming digital payments in India. The Reserve Bank of India (RBI) and National Payments Corporation of India (NPCI) are introducing new updates. These changes aim to make UPI more inclusive and efficient. The deadline for full implementation is January 1, 2025.
What is UPI 123Pay?
UPI 123Pay allows feature phone users to make digital payments without an internet connection. It uses simple methods like:
- IVR Calls: Payments via interactive voice response (IVR) systems.
- Missed Calls: Transactions initiated by giving missed calls to specific numbers.
- Feature Phone Apps: Easy-to-use apps designed for non-smartphone users.
- Sound Technology: Payments are processed using sound waves.
This service is ideal for users in rural areas without smartphones or reliable internet access.
Key Changes to UPI 123Pay
1. Transaction Limit Increase
The transaction limit for UPI 123Pay will rise from ₹5,000 to ₹10,000. This change aims to help feature phone users. UPI 123Pay is designed for people without internet access.
2. Aadhaar OTP for Onboarding
Users can now onboard for UPI 123Pay using Aadhaar OTP. This simplifies registration for new users.
3. Purpose Code for UPI 123Pay Transactions
A new purpose code, “86,” has been introduced. This code will tag all UPI 123Pay transactions.
- Financial and Non-Financial Transactions
All UPI 123Pay payments must include purpose code 86 in their tags. - New Initiation Modes
Banks must update initiation modes to comply with UPI guidelines. Old modes are now void.
Here are the new initiation modes:
| Mode | Tag Name | Value |
|---|---|---|
| On-call transactions | TYPE | IVR |
| Feature phone apps | TYPE | FP |
| Missed call-based | TYPE | MCP |
| Sound frequency tech | TYPE | TONE |
4. UPI Numeric ID Mapper
The NPCI has mandated using a UPI numeric ID mapper. This step ensures seamless integration for UPI numbers.
Also read | Google Pay Launches New Features: UPI Circle, UPI Vouchers, and More
UPI Lite Changes
RBI also announced updates for UPI Lite, which is popular for small-value transactions.
- Wallet Limit Raised: The limit increased from ₹2,000 to ₹5,000.
- Transaction Limit Increased: Individual transaction limits now go up from ₹500 to ₹1,000.
These changes make small payments quicker and more convenient.
Why These Changes Are Important
RBI Governor Shaktikanta Das highlighted the impact of UPI on India’s financial ecosystem. UPI has promoted financial inclusion and ease of use. The new updates will:
- Support users without smartphones or internet access.
- Increase UPI adoption across all sections of society.
- Simplify small-value and feature phone-based transactions.
Future Updates in UPI
1. Biometric Authentication for UPI
The NPCI is exploring biometric authentication for UPI transactions. This will remove the need for OTPs and PINs. Partnerships with startups are being discussed to enable this feature.
2. High-Value Transaction Limits
From September 16, 2024, the UPI limit for certain payments increased to ₹5 lakh. This applies to specific categories, like IPOs and large-value transactions.
Biometric Authentication: The Future of UPI
The NPCI is exploring biometric authentication for UPI transactions. This could eliminate the need for OTPs and PINs. Partnerships with startups are underway to enable this innovative feature.
High-Value UPI Transactions
From September 16, 2024, the NPCI increased the limit for specific UPI payments to ₹5 lakh. This applies to:
- Investments in IPOs.
- Large-value purchases.
This update addresses the growing demand for high-value digital payments.
Advantages of UPI 123Pay
- No Internet Required: Works even without a stable Internet connection.
- Affordable: Feature phone users can access UPI without needing a smartphone.
- User-Friendly: The methods are easy to understand and use.
- Promotes Financial Inclusion: Helps rural users participate in India’s digital economy.
Conclusion
The upcoming UPI changes mark a significant step toward making digital payments more inclusive. Feature phone users, small-scale businesses, and everyday consumers will benefit. These updates ensure that UPI continues to evolve and meet India’s growing financial needs.
As the deadline for implementation approaches, it’s important to understand and adapt to these changes. Whether you use UPI 123Pay or UPI Lite, these updates will enhance your payment experience.
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