RBI Doubles UPI 123Pay Limit to ₹10,000 for Feature Phones

The Reserve Bank of India (RBI) has raised the transaction limit for UPI 123Pay from ₹5,000 to ₹10,000, enhancing its utility for India’s 400 million feature phone users. Launched in March 2022, UPI 123Pay enables digital transactions without internet access through IVR, missed calls, and sound-based payments. Alongside, the UPI Lite wallet limit has been increased from ₹2,000 to ₹5,000 to facilitate small-value transactions. These moves aim to deepen financial inclusion and boost the adoption of digital payments, particularly among underserved populations.

Key Changes in UPI 123Pay

• Increased Transaction Limit: Users can now transact up to ₹10,000, doubling the previous cap.
• Enhanced Security: Aadhaar-based OTP authentication adds a new security layer.
• Standardized Tagging: Introduction of purpose code (86) improves tracking and reporting.
• Improved Initiation Modes: Multiple options include IVR, missed calls, feature phone apps, and sound-based technology.
• UPI Number Functionality: Integration with UPI numeric ID mapper simplifies payments.

What is UPI 123Pay?

UPI 123Pay is a platform enabling feature phone users to perform UPI transactions without an internet connection. It supports various methods, including:

• IVR Calls: Users call a predefined number and follow voice prompts.
• Missed Calls: Payments initiated via missed calls to merchant-specific numbers.
• App-based Transactions: Simplified UPI apps for feature phones.
• Sound-based Payments: Contactless transactions using sound waves.

Benefits of Recent Updates

• Increased Convenience: Higher limits and new features make digital payments easier.
• Enhanced Security: Aadhaar OTP ensures robust authentication.
• Improved User Experience: Streamlined processes and diverse options enhance usability.

UPI Lite Updates

The UPI Lite wallet limit increase to ₹5,000 supports faster and more efficient small-value transactions by allowing users to store money directly on their devices.

Monetary Policy Context

In its recent review, the RBI’s Monetary Policy Committee maintained the repo rate at 6.5%, balancing inflation control and growth support. Governor Shaktikanta Das emphasized flexibility to respond to economic dynamics, with GDP growth for FY25 forecasted at 7.2% and inflation capped at 4.5%.

Summery of the news