3 RBI announcements that will turbocharge UPI, UPI Lite
Conversational payments on UPI, boosting UPI Lite payment limit, and offline transactions with UP Lite could usher in the next digital payments age in India.
Money Poise
On August 10th, the Reserve Bank of India announced three new capabilities for the Unified Payments Interface (UPI), one of which is the ability to conduct transactions via chat with an artificial intelligence system.
These actions were announced by Governor Shaktikanta Das when he reported on the results of the RBI's semimonthly policy review. The benchmark repo rate from the central bank remained unchanged at 6.5 percent.
Conversational Payments on UPI
Das has proposed rolling out Conversational Payments on UPI, a service that would let customers have conversations with an AI-powered system to set up and finalise transactions across a secure network.
The Unified Payments Interface (UPI) has revolutionised India's digital payments environment, and conversational instructions have the potential to further simplify and expand its use.
The functionality will be accessible through UPI channels on both smartphones and feature phones. The service will be accessible in Hindi and English at launch, with support for additional Indian languages coming later.
"The RBI governor's announcement today regarding the introduction of conversational payments and offline functionality in UPI Lite marks a pivotal step that is set to reshape India's economic trajectory," said Rajsri Rengan, India Head of Development, Banking and Payments at FIS. She went on to say that these innovations could have a profound impact on the future of the digital payment ecosystem and the spread of financial security.
"A simplified AI-based interface can reduce barriers to adoption, especially among senior citizens and people with disabilities, and give them seamless access to their finances," said Adhil Shetty, CEO of BankBazaar.com.
UPI Lite limit raised
The RBI has increased the maximum amount that may be transferred via UPI Lite from Rs 200 to Rs 500.
With the launch of UPI Lite in September 2022, the National Payments Corporation of India (NPCI) aimed to reduce transaction failures and increase the speed with which low-value transactions may be processed.
In order to speed up the transaction process, it permitted users to make purchases of up to Rs 200 each day without entering a pin code. While the maximum amount that may be transferred in a single transaction has been increased to Rs 500, the maximum amount that can be in a user's UPI Lite balance has been remained same at Rs 2,000.
Paytm, BHIM App, Google Pay, and other payment apps support UPI Lite. UPI LIte has been launched with nine Indian financial institutions: Canara Bank, HDFC Bank, Indian Bank, Kotak Mahindra Bank, Punjab National Bank, State Bank of India, Union Bank of India, and Utkarsh Small Finance Bank.
Offline UPI payments
The RBI plans to promote UPI Lite by introducing Near Field Communication (NFC) technology for offline payments. In addition to facilitating digital payments at retail even when internet or telecommunications connectivity is poor or nonexistent, this enhancement will also guarantee transaction speed and reliability. Soon, NPCI will receive new instructions from the U.S. government.
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