RBI increases transaction limit for UPI123Pay, UPI Lite to further increase UPI adoption

In a move aimed at boosting digital payments in India, the Reserve Bank of India (RBI) has announced a significant increase in transaction limits for UPI123Pay and UPI Lite.

The decision was made during the latest meeting of the RBI’s Monetary Policy Committee (MPC) and is expected to further accelerate the adoption of the Unified Payments Interface (UPI) across the country, especially for feature phone users and small transactions.

UPI123Pay transaction limit doubled

The RBI has decided to double the per-transaction limit for UPI123Pay, raising it from Rs 5,000 to Rs 10,000.

UPI123Pay was introduced in March 2022 to extend UPI services to feature phone users without requiring an internet connection. It currently supports 12 languages, making digital payments accessible to a larger section of the population.

With this new limit, the central bank aims to widen the use cases of UPI123Pay, empowering more users to make larger payments conveniently.

Increased limits for UPI lite wallet

In addition to UPI123Pay, the RBI has also enhanced the limits for UPI Lite, a platform specifically designed for small-value transactions. The per-transaction limit for UPI Lite has been increased from Rs 500 to Rs 1,000, while the overall wallet limit has been raised from Rs 2,000 to Rs 5,000.

UPI Lite allows users to make quick payments without a full internet connection, making it a convenient tool for low-value daily transactions. This is the second time the RBI has revised UPI Lite limits, with a previous increase implemented in August 2023.

Focus on expanding UPI adoption

These changes are part of the RBI’s broader strategy to drive further adoption of UPI across all segments of the population. UPI has already transformed India’s financial landscape by making digital payments more accessible and inclusive.

By increasing the limits for UPI123Pay and UPI Lite, the RBI hopes to bring more users into the digital payment ecosystem, particularly those in rural and underserved areas who rely on feature phones.

NPCI to issue instructions for implementation

The National Payments Corporation of India (NPCI), which oversees the UPI platform, will issue the necessary instructions to facilitate these changes. The revised transaction and wallet limits are expected to go into effect shortly after the NPCI communicates the details to banks and payment service providers.

The move is seen as another step in strengthening India’s digital payment infrastructure, which has witnessed significant growth in recent years.

Future enhancements in payment systems

In addition to raising transaction limits, the RBI has also proposed to introduce a beneficiary account name look-up facility for Real Time Gross Settlement System (RTGS) and National Electronic Funds Transfer (NEFT).

The feature, which is already available for UPI and Immediate Payment Service (IMPS), will enable remitters to verify the name of the recipient before executing payments, reducing the risk of fraud and wrong credits.