Reserve Bank announces new UPI features

Mumbai: To ease customer experience in payment system, especially in UPI, the Reserve Bank of India on Thursday announced Conversational Payments on UPI, which will enable users to engage in a conversation with an AI-powered system to do transactions.

It also announced Near Field Communication Technology (NFC) in offline payments via UPI Lite besides enhancing transaction limits for small value digital payments to Rs 500 from Rs 200 in UPI Lite. 

Conversational Payments on UPI will be made available in both smartphones and feature phones-based UPI channels. The facility will, initially, be available in Hindi and English and will subsequently be made available in more Indian languages. Instructions to NPCI will be issued shortly said the RBI.

"The integration of Near Field Communication (NFC) technology via 'UPI-Lite' for offline payments narrows the digital gap between urban and rural India, allowing users to make swift payments even in regions with weak internet connectivity," said Anand Kumar Bajaj, Founder, MD & CEO, PayNearby.

Mandar Agashe founder and managing director at Sarvatra Technologies said, "UPI has significantly contributed to positioning India as the leader of digital payments. The enhancements proposed by the Central Bank will further accelerate the adoption of UPI. While QR code made payments very easy for everyone, the introduction of “Conversational Payments” on UPI has the potential to take the ease of payments to the next level. Those who find it difficult to navigate through a mobile application for making digital payments as they are not tech-savvy or want to save time by getting AI to direct them, will now be able to execute UPI transactions with ease."

"With the introduction of Near Field Communication (NFC) technology through ‘UPI-Lite’ on-device wallet, offline payments will become more secure while being seamless and fast. UPI offline payments shouldn’t hinder the capacity to make payments above ₹200 per transaction. The move to enhance the transaction limit for small value digital payments in offline mode from ₹200 to ₹500, addresses this issue and thus will eliminate the need for multiple transactions."

Launched by the National Payments Corporation of India (NPCI) in September 2022, UPI Lite allows quick small-value transactions by optimising processing resources for banks, thereby reducing transaction failures.

It allowed users to conduct transactions of up to Rs 200 a day without the need for a pin code, which reduces the transaction time. While the transaction limit has been raised to Rs 500 now, the UPI Lite balance ceiling has been left unchanged at Rs 2,000 to contain the risks associated with relaxation of two-factor authentication.

UPI Lite is available on Paytm, BHIM App, GooglePay and other payments apps.