Key UPI Changes You Need To Know For 2024
With the advent of the Unified Payments Interface (UPI) system developed by the National Payments Corporation of India (NPCI), the Indian digital payment system has witnessed revolutionary growth in the last five years. UPI enabled instant money transfers between bank accounts, people, and merchants, reducing cumbersome physical currency transactions.
The NPCI has now implemented some changes in the UPI, aiming to improve its efficiency. The significant changes the UPI payment system witnessed in the new year are as follows:
Deactivation of inactive UPIs:
NPCA has urged payment apps like Paytm, Google Pay, Phone Pe, and banks to disable UPI IDs and numbers that have been inactive for over a year. According to the guidelines, numbers and IDs will be blocked for at least one year, which would help curb dormant accounts and potential misuse.
Transaction Limits:
The Reserve Bank of India’s (RBI) has decided to hike UPI payment limits for hospitals and educational institutions to Rs 5 lakh from Rs 1 lakh per transaction. However, the maximum daily payment limits other than this still remain at Rs. 1 lakh.
Interchange Fee:
In early 2023, NPCI announced an interchange fee of 1.1 percent for specific merchant UPI transactions exceeding Rs 2,000 conducted through prepaid payment instruments (PPI), such as online wallets.
Four-hour time limit:
According to a report, NPCI has implemented a four-hour time limit for the first payment exceeding Rs 2,000 between users who haven’t transacted before. They are likely to introduce the ‘Tap and Pay’ feature. However, an official announcement has yet to be made.
Moreover, with the UPI ATMs, which the RBI is poised to introduce nationwide, customers can withdraw cash directly from their bank accounts by just scanning a QR code.
UPI transactions in November 2023 reached Rs 17.4 trillion, which was a record high and 1.4 percent higher compared to Rs 17.16 trillion in October 2023. However, the number of transactions decreased by 1.5 percent to 11.24 billion, versus a record high of 11.41 billion a month earlier.
