The Reserve Bank of India (RBI) has put forth a proposal to enhance the per transaction payment limit for UPI Lite in offline mode to ₹500. The central bank also introduced other measures aimed at promoting the widespread adoption and usage of digital payments within the country.
Current Limits and Need for Expansion
At present, the Reserve Bank has set a limit of ₹200 per transaction and an overall cap of ₹2,000 per payment instrument for small value digital payments in offline mode, including UPI Lite and the National Common Mobility Card (NCMC). These channels offer swift, dependable, and contactless modes of payment for everyday small value transactions, such as transit payments.
RBI Enhanced Limits to Encourage Adoption
RBI Governor Shaktikanta Das highlighted the demand for an increase in these limits to accommodate the evolving needs of users. In an effort to promote broader adoption of these payment modes and facilitate their applicability to various use cases, the proposal entails raising the per transaction limit to ₹500. However, the overall limit of ₹2,000 will remain unchanged to mitigate the potential risks associated with the relaxation of two-factor authentication.
RBI Introducing Conversational Payments on UPI
To enhance the digital payment experience, the RBI plans to introduce ‘Conversational Payments’ on the Unified Payments Interface (UPI). This innovative feature will allow users to engage in transactions through conversational interactions with AI-powered systems. The goal is to create a safe and secure environment for users to initiate and complete transactions using AI technology.
Enabling Offline Payments via NFC
RBI Governor Shaktikanta Das also revealed plans to introduce offline payments on UPI using Near Field Communication (NFC) technology through ‘UPI-Lite’ on-device wallet. This move aims to further expedite small value transactions on UPI by offering offline transaction capabilities, particularly in situations with weak or no internet/telecom connectivity. The proposed enhancements are expected to contribute to the growth of digital payments and encourage the adoption of UPI-Lite. We will issue instructions to the National Payments Corporation of India (NPCI) shortly to facilitate the implementation of these measures.
