Tag: UPI

NPCI International and Uzbekistan’s NIPC Partner for UPI Payments via UZQR

NPCI International Payments Ltd. (NIPL), the international arm of the National Payments Corporation of India (NPCI), has entered into a commercial agreement with the National Interbank Processing Centre JSC (NIPC), operator of Uzbekistan’s national payment system, HUMO, on 30th August 2026. The partnership enables Indian travellers to scan Uzbekistan’s national interoperable QR code UZQR using their familiar UPI-enabled applications to make instant merchant payments across the country.

The announcement was made during the bilateral visit of the Prime Minister of India to Uzbekistan. The execution of the agreement follows formal approvals from financial regulators, including the Reserve Bank of India (RBI) and the Central Bank of Uzbekistan (CBU), which designated HUMO as NIPL’s authorised partner for cross-border merchant acceptance.

Key Highlights of the Agreement

  1. Universal Merchant Acceptance: By integrating with CBU’s mandated Unified National QR infrastructure (UZQR), UPI users gain near-universal acceptance across retail, hospitality, and service merchants in Uzbekistan.
  2. Seamless Travel Experience: Indian tourists, business travellers, and students can make direct person-to-merchant (P2M) payments from their Indian bank accounts, eliminating foreign exchange markup friction and reducing reliance on international cards or cash.
  3. Strengthened Bilateral Ties: The initiative advances digital public infrastructure cooperation and aligns with both nations’ broader strategic and economic goals.

UPI is Accepted in Ten Countries

Singapore, the United Arab Emirates, France, Mauritius, Nepal, Bhutan, Qatar, Sri Lanka, Cambodia, and Greece, enabling Indian travellers to make seamless payments abroad through UPI.

How UPI Transformed from ₹7,000 crore to ₹314 lakh crore

The Unified Payments Interface (UPI), launched on 25 August 2016, has completed 10 years. NPCI developed the platform under the Reserve Bank of India’s regulatory oversight. UPI has since become the backbone of India’s digital payments ecosystem. It also stands as a critical driver of financial inclusion nationwide.

Over the decade, UPI has demonstrated extraordinary scale and consistent momentum. Annual transaction volume expanded from just 1.78 crore in FY17. It reached over 24,162 crore transactions by FY26, an almost 13,000-fold surge.

Transaction value similarly rose sharply during this same period. It grew from ₹7,000 crore to around ₹314 lakh crore, representing significant growth.

Growth wasn’t limited to early years, continuing steadily throughout the decade. Volume rose from 92 crore in FY18 to 24,162 crore by FY26. This reflects a compound annual growth rate of 188%. Transaction value similarly grew at a 155% compound annual rate.

The year 2026 marked several significant milestones in UPI’s growth trajectory. Monthly transaction volumes crossed 2,300 crore for the first time in May. This reached 2,320 crore transactions. Momentum continued through the year, with July recording 2,366 crore transactions.

Banking participation has expanded significantly since UPI’s initial launch phase. Only 44 banks were ‘live on UPI’ during FY17. This number grew substantially, reaching 703 banks by FY26. This onboarding spans public, private, small finance and cooperative banks.

Examining transaction patterns reveals a clear divergence between volume and value. Person-to-merchant transactions account for 63% of total transaction volume. Conversely, person-to-person transactions dominate the transaction value, accounting for 71% overall.

Ticket size distribution further illustrates UPI’s integration into daily life. For P2M transactions, 86% involved payments below ₹500. This shows UPI’s deep integration into routine retail and commerce. P2P transactions also showed significant low-value usage, with 59% below ₹500.

UPI: Global expansion

Globally, UPI has evolved into a benchmark for digital payments. As of 2025, it accounts for nearly 49% of global real-time transaction volume. This milestone earned recognition from the International Monetary Fund (IMF). With over 66 crore daily transactions, UPI has surpassed other global networks.

UPI has also expanded internationally, increasingly supporting cross-border digital payments. It’s currently operational across eleven countries worldwide. These include the United Arab Emirates, France, Bhutan, Sri Lanka and Nepal. Singapore, Mauritius, Qatar, Cambodia, Greece and the Maldives complete this list.

Looking ahead, UPI’s next decade promises even greater transformation domestically. The Government of India remains committed to further expanding this ecosystem, according to the Press Information Bureau (PIB).

“By bringing new users and merchants to the UPI Ecosystem, Government of India remains committed to enabling the next phase of UPI-led innovation and strengthening India’s digital payments ecosystem through continued policy support, technological advancement, and greater financial inclusion,” PIB added.

UPI MDR Charges Explained: High-Value Transaction Limit Insights

The government is considering bringing back the Merchant Discount Rate (MDR) for a limited category of high-value UPI transactions as it looks for a sustainable way to fund India’s rapidly expanding digital payments ecosystem.

A Parliamentary Standing Committee on Finance has recommended the early implementation of a calibrated, tiered MDR framework for higher-value merchant transactions while protecting small merchants and person-to-person (P2P) payments. However, the government has not yet finalised the transaction threshold or MDR rate, PTI reported.

What high-value UPI transaction limit is the government considering?

There is currently no confirmed transaction limit above which UPI payments would attract an MDR. According to a reply from the Department of Financial Services (DFS) to the Parliamentary panel, the government is examining the feasibility of restoring MDR for “certain high-threshold transactions/merchants”. It is also considering a tiered incentive structure that would gradually reduce government support for the UPI ecosystem over the coming years.

The exact threshold, MDR rate and categories of merchants that could be covered are yet to be finalised. According to a Business Standard report, the UPI and Services Steering Committee headed by the National Payments Corporation of India (NPCI) will decide the structure of any MDR and the threshold above which transactions could attract the fee.

What is MDR?

Merchant Discount Rate, or MDR, is a fee charged to merchants for accepting certain digital payments. The fee is generally shared among different participants in the payments ecosystem, including banks, payment service providers and payment infrastructure companies.

UPI previously had an MDR of up to 0.30% on merchant transactions until 2019. The government introduced a zero-MDR regime from January 2020 to encourage digital payments and reduce dependence on cash. Under the current system, merchants do not pay a transaction fee for accepting UPI payments, although banks and payment companies continue to incur costs for processing and maintaining the infrastructure.

Why is the government considering MDR?

The key issue is the growing cost of running the UPI ecosystem. The government currently provides incentives to promote RuPay debit cards and low-value BHIM-UPI transactions and compensate payment companies for losses arising from zero MDR.

The Parliamentary Standing Committee noted that the Centre has allocated ₹2,000 crore for this purpose. However, the industry’s estimated operational cost is around ₹20,700 crore. The panel has therefore raised concerns over the huge gap between government support and the actual cost of operating the payments infrastructure.

The Committee warned that continued dependence on inadequate government subsidies could affect investments in critical areas such as cybersecurity, fraud prevention and payment network infrastructure. It has therefore called for a self-reliant revenue model that reduces the burden on the government while ensuring that payment companies can continue investing in the ecosystem.

Will MDR apply to all UPI transactions?

No. The proposal being considered is for selected high-value merchant transactions rather than everyday UPI payments. The Parliamentary panel has specifically recommended safeguarding small merchants and P2P transfers.

This means an ordinary UPI transfer between two individuals is not currently proposed to attract an MDR. Similarly, the government has indicated that any potential charge would apply only to a limited category of merchant transactions above a specified threshold.

Will consumers have to pay for using UPI?

According to reports, there is currently no proposal for a blanket charge on UPI users. The proposed MDR would be associated with selected merchant transactions rather than a fee imposed on every individual making a UPI payment.

The government is also considering a nominal rate that would be lower than charges generally associated with debit or credit card transactions. The objective is to create a revenue stream for banks, payment service providers and payment infrastructure companies without undermining the widespread adoption of UPI.

Why does the Parliamentary panel want a tiered MDR?

The panel believes the current zero-MDR model is difficult to sustain as UPI volumes continue to grow. It has recommended a self-reliant, tiered revenue mechanism under which higher-value merchant transactions could generate revenue while small merchants and P2P transfers remain protected.

The panel said the legal framework to introduce such a calibrated MDR now exists following Parliament’s approval of amendments to the Payment and Settlement Systems Act, 2007. It has urged the government to notify and operationalise the framework quickly.

“The Committee, therefore, reiterates the recommendation to expedite the implementation of a self-reliant, tiered revenue framework for higher-value merchant transactions while safeguarding small merchants and P2P transfers,” the panel said, according to PTI.

What changed in the law?

Earlier this week, Parliament passed a Bill amending the Payment and Settlement Systems Act, 2007. The amendments remove the existing legal restriction that prevents banks and payment service providers from imposing MDR on notified electronic payment modes.

The changes create the legal space for the government to permit charges on UPI and other notified electronic payments. However, the law itself does not establish a specific UPI MDR rate or transaction threshold. Those details are still to be worked out.

The amendments also relate to Section 269SU of the Income Tax Act, under which businesses with annual turnover exceeding ₹50 crore are required to provide specified electronic payment facilities, including RuPay debit cards and BHIM-UPI QR codes.

Why does this matter for UPI?

UPI has grown into one of the world’s largest digital payments systems, and its scale means even relatively small operating costs can become significant. The Parliamentary panel has noted that UPI could eventually handle as many as 150 billion transactions a month and add around 600 million new users, according to Business Standard.

India’s UPI acceptance in Cambodia, Cambodia’s National QR Code

NPCI International Payments Limited (NIPL), the international arm of the National Payments Corporation of India (NPCI), has officially partnered with ACLEDA Bank Plc. to launch Unified Payments Interface (UPI) acceptance in Cambodia.

The expansion of UPI acceptance in Cambodia is not merely a technical achievement but a significant step towards enhancing bilateral relations between India and Cambodia. This partnership facilitates not just economic transactions but also cultural exchanges, fostering a deeper understanding and collaboration between the two nations.

The formal ceremony in Phnom Penh also highlighted the importance of this initiative for both nations. H.E. Dr. Chea Serey emphasized the role that digital payment solutions play in modernizing Cambodia’s economy, stating that this partnership would not only streamline payments but also attract more tourists and investors.

With the implementation of the UPI framework, Indian travelers can expect a smoother experience during their stay. For instance, tourists can easily pay for local experiences such as guided tours, culinary classes, and transportation services without worrying about currency conversion rates or the limitations of cash transactions.

The breakthrough collaboration went live following a formal ceremony in Phnom Penh, attended by H.E. Dr. Chea Serey, Governor of the National Bank of Cambodia (NBC), alongside high-level representatives from the Reserve Bank of India (RBI). The event marked the completion of Phase 1 in establishing a cross-border QR payment linkage between the two nations through Bakong’s KHQR, Cambodia’s national QR code.

This partnership could also serve as a model for other countries looking to enhance their digital payment ecosystems. As more nations adopt similar technology, global commerce could evolve to be more interconnected and efficient, ultimately benefiting consumers and businesses alike.

The first phase enables millions of Indian travellers to make seamless QR payments at over 4.5 million Cambodian merchants, with a two-way corridor to follow. While the first phase prioritizes incoming Indian travellers, the partnership is explicitly designed to scale. In the subsequent phase, the corridor will become fully bi-directional. Cambodian citizens visiting India will soon be able to use their domestic banking and digital payment applications to scan millions of UPI QR codes throughout India, completing a highly advanced, two-way interoperable financial network through Bakong’s KHQR.

  • Increased Safety and Security: Digital payments reduce the risks associated with carrying cash, making transactions safer for both travelers and merchants. This aspect is particularly important in tourist areas where theft can be a concern.
  • Promotion of Local Economy: By making it easier for Indian tourists to spend in Cambodia, local businesses can thrive. Restaurants, hotels, and attractions will benefit from the influx of spending, contributing to the overall growth of the Cambodian economy.
  • Facilitation of Small Transactions: The UPI system allows for small-value transactions, which encourages spending on items that might typically be overlooked when using cash. This convenience can lead to increased customer satisfaction and more business for local vendors.

    • As UPI acceptance expands globally, it is essential to observe how it impacts not just tourism but also international trade. The ability to transact seamlessly across borders can encourage Indian companies to invest in Cambodian projects, fostering a stronger economic relationship between the two countries.

    In conclusion, the launch of UPI acceptance in Cambodia not only marks a significant milestone in digital payment integration but also opens up new avenues for economic collaboration and cultural exchange. As this system evolves, it will be interesting to see how it shapes the future of commerce between India and Cambodia and beyond.

    UPI acceptance in Cambodia is indeed a promising development. With the infrastructure in place, the next step will be to educate both Indian travelers and Cambodian merchants about the benefits and operational aspects of using UPI. Workshops and promotional campaigns can help raise awareness and ensure a smooth transition into this new payment method.

    The Strategic Impact: Driving Tourism and Digital Efficiency

    This digital payment corridor represents a major shift in how commerce operates between the two countries, delivering immediate benefits:

    • Enhanced Traveler Convenience: Eliminates the friction of physical currency exchange, carrying large amounts of cash, or navigating unfamiliar foreign exchange fees.
    • Economic Boost for Local Merchants: Cambodian businesses gain immediate access to a massive, tech-savvy Indian visitor demographic, driving higher transaction volumes.
    • Operational Efficiency: Local merchants will experience optimized cash management, lowered overhead costs associated with physical cash handling, and secure, real-time transaction settlements.

    UPI Coverage around the world

    UPI is accepted in Eight countries – Singapore, the United Arab Emirates, France, Mauritius, Nepal, Bhutan, Qatar and Sri Lanka – enabling Indian travellers to make seamless payments abroad through familiar platforms. Now, Cambodia is the ninth country joining the list.

    Important Changes to UPI Regulations Effective August 1st

    New UPI Rules: Significant Changes Ahead

    Significant changes are coming to the rules for using the Unified Payments Interface (UPI) starting August 1st. The National Payments Corporation of India (NPCI) has issued new guidelines that will apply to all UPI apps like Google Pay, PhonePe, and Paytm. The primary goal of these changes is to reduce the load on the UPI system while enhancing the transaction process to make it faster and more secure. Let’s dive into the details of these new rules.

    What Are the New Rules?

    1. Limit on Balance Checks:

      From now on, a user can check their account balance a maximum of 50 times a day from a single UPI app. Any attempt to check the balance beyond this limit will be unsuccessful. This step has been taken to alleviate the excessive load on the servers.
    2. Limit on Viewing Linked Bank Accounts:

      The list of bank accounts linked to your mobile number can now be viewed only 25 times a day. This new rule is designed to decrease the unnecessary API calls generated by repeatedly viewing this list.
    3. New Timings for Auto-Pay Transactions:

      AutoPay transactions for bills, subscriptions, or investments will now be processed only during specific off-peak hours. These time slots are:
      • Before 10:00 AM
      • Between 1:00 PM and 5:00 PM
      • After 9:30 PM

        This will help in reducing the pressure on servers during peak hours and allow other transactions to be completed smoothly.
    4. Limit on Checking Failed Transaction Status:

      If a transaction fails, its status can only be checked 3 times a day, with a 90-second interval maintained between each check. This rule is intended to reduce server load and speed up the process of refunding money from failed transactions.
    5. Account Holder Name Verification:

      This rule has been in effect since June 30th. The registered name of the recipient is now displayed on the screen before any UPI transaction. This measure enhances transaction security and reduces the likelihood of sending money to the wrong account.

    Advice for General Users

    • Stay Informed: Being aware of these new rules will make your UPI usage smoother.
    • Avoid Unnecessary Checks: Refrain from repeatedly checking your balance or the list of linked accounts.
    • Remember Auto-Pay Timings: Your Auto-Pay transactions will be processed according to the new schedule, so be prepared accordingly.

    It is expected that these new rules will contribute to making the UPI system more stable and reliable. The NPCI has directed all banks and payment system operators to strictly enforce these regulations.

    Impact of GST on UPI Payments: A Challenge for Small Businesses, According to SBI

    Aggressive Tax Enforcement Threatens Gains of GST for Small Businesses, Warns SBI

    MUMBAI: A recent report from the State Bank of India (SBI) has issued a warning regarding the potential ramifications of aggressive tax enforcement on small businesses, which could ultimately undermine the advantages of formalisation achieved under the Goods and Services Tax (GST) regime.

    In a detailed research note, the bank cautioned that such enforcement measures risk pushing informal players back into the cash economy. A pertinent example highlighted in the report is a case from Karnataka, where numerous small traders and shopkeepers in Bengaluru have received disproportionately high tax notices. These notices were primarily based on digital footprints, particularly UPI transactions, which raised concerns about the fairness of the tax assessments.

    The SBI report underscores the importance of moderation in enforcement, stating, “While the intent to capture a more accurate picture of economic activity and reduce tax evasion is commendable, such enforcement must be balanced with sensitivity.” The bank warns that overly aggressive scrutiny could inadvertently drive small businesses back into the informal and cash-based economy, thus undermining the very purpose of the GST formalisation.

    Moreover, SBI emphasizes that inclusivity should remain a central tenet in the future of GST. GST has laid the foundation for greater accountability and revenue generation,” the report declares, “but its long-term success will depend on ensuring that it empowers all stakeholders, especially small traders, instead of penalising them.

    As the discussions around tax policy continue, it remains crucial to balance enforcement measures with the need to support small businesses, ensuring that the benefits of formalisation are preserved.

    Vegetable vendor has received over 1.63 crore via UPI Received Tax Demand Notice

    An unregistered vegetable vendor from the town has received a notice for the non-compliance of new the Goods and Services Tax (GST) laws and a tax demand of Rs 29 lakhs.

    Shankargouda Hadimani, who has been running a vegetable shop near the Municipal High School grounds for the last four years, received payments mostly through UPI and other ewallet.

    The GST officials had served a notice on the vendor stating, “You have done transactions worth Rs 1.63 crore in the last four years, for which, you have to pay GST of Rs 29 lakh.” Shocked by tax demand, the vendor has stopped accepting payments through UPI.

    I procure vegetables from the farmers and sell the produce at the small shop I own near Municipal High School grounds. Nowadays, customers favour UPI payments.

    I promptly file I-T returns every year. I have records for the same. The GST officials have served a tax demand of Rs 29 lakh. How can I pay such a huge amount?,” Shankargouda questions. 

    Myth Busted: No GST on UPI Transactions Over ₹2000

    Claims that the Government is considering levying Goods and Services Tax (GST) on UPI transactions over ₹2,000 are completely false, misleading, and without any basis.

    The claims that the Government is considering levying Goods and Services Tax (GST) on UPI transactions over ₹2,000 are completely false, misleading, and without any basis. Currently, there is no such proposal before the Government.

    GST is levied on charges, such as the Merchant Discount Rate (MDR), relating to payments made using certain instruments.

    Effective January 2020, the Central Board of Direct Taxes (CBDT) has removed the MDR on Person-to-Merchant (P2M) UPI transactions through the Gazette Notification dated 30th December 2019.

    Since currently no MDR is charged on UPI transactions, there is consequently no GST applicable to these transactions.

    The Government remains committed to promoting digital payments via UPI.

    To support and sustain the growth of UPI, an Incentive Scheme has been operational from FY 2021-22. This scheme specifically targets low-value UPI (P2M) transactions, benefiting small merchants by alleviating transaction costs and promoting wider participation and innovation in digital payments.

    The total incentive payouts under this scheme over the years reflect the Government’s sustained commitment to promoting UPI-based digital payments. Allocation under the scheme over the years has been:

    • FY2021-22: ₹1,389 crore

    • FY2022-23: ₹2,210 crore

    • FY2023-24: ₹3,631 crore

    These measures have significantly contributed to India’s robust digital payments ecosystem.

    According to the ACI Worldwide Report 2024, India accounted for 49% of global real-time transactions in 2023, reaffirming its position as a global leader in digital payments innovation.

    UPI transaction values have seen an exponential increase, growing from ₹21.3 lakh crore in FY 2019-20 to ₹260.56 lakh crore by March 2025. Specifically, P2M transactions have reached ₹59.3 lakh crore, reflecting growing merchant adoption and consumer confidence in digital payment methods.

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    Read this release in: Malayalam , Gujarati , Urdu , Marathi , Hindi

    Proposal to Levy 18% GST on UPI Transactions Above ₹2,000 – What You Should Know

    Introduction to the Proposal
    The change of digital payment in India is mainly operated by the Integrated Payment Interface (UPI). This user-friendly, quick, and cost-free service has basically integrated into individuals across the country.
    However, recent reports have expressed concern among digital payments users, as the government is being discussed about starting an 18% Goods and Services Tax (GST) on potential UPI transactions. Although this proposal is still in its early stages, its possible implementation can greatly affect the landscape of digital payments in India. The introduction of such taxes can change the overall mobility of user behavior and the digital payment ecosystem.
    Current Status of UPI in India
    The adoption of UPI has been steadily increasing. In March 2025, an impressive 1,300 crore transactions were processed by UPI, which illuminated its domination in the area of ​​digital payment.
    This increase in use underscores a key role in changing how UPI transactions are carried out, strengthening its position as a leading platform for digital financial exchange.


    Reasons for the popularity of UPI:

    • Zero Transaction Fee
    • 24×7 service availability
    • Easy interface
    • Fast processing

    The government, along with the Reserve Bank of India (RBI), has actively supported this service by offering it at no cost so far. However, due to rising revenue pressures and funding difficulties, the government is now reevaluating its approach.

    What is the Proposed Change?
    The government has proposed to implement 18% GST on all UPI transactions of more than ₹ 2,000. This tax will be levied on banks and applications that facilitate UPI services, but the financial burden can eventually be passed to consumers and traders.

    Objective of the proposal

    Potential Impact of the Proposal
    The effects of this initiative could resonate across multiple dimensions, affecting not just technology but also consumers, merchants, and the broader economy.

    Impact on Consumers


    Impact on Merchants

    Impact on Digital Economy

    • UPI growth may slow down
    • Digital India mission may suffer a setback
    • Startups and online businesses will be affected
    • Public Reaction and Expert Opinions

      General Public
      The ordinary people have greatly rejected the proposal. Many consumers argue that the government initially released UPI to facilitate affordable and convenient digital transactions, and now introducing taxes on it weakens the confidence.

      Expert Opinions
    • Some experts argue that it may be necessary to apply a little fee for long-term durability of digital infrastructure. 
    • On the contrary, some argue that this adjustment can negatively affect the efforts of digital inclusion. 
    • Discussion highlights the tensions between financial stability and equal access to digital resources.

    What Do NITI Aayog and RBI Say
    The Reserve Bank of India has not provided any formal statement regarding this matter as of now. However, they have previously expressed that UPI should remain free to ensure it is accessible to everyone.

    Similarly, NITI Aayog has maintained a consistent stance, advocating for a “Free Digital Payment Infrastructure” to promote inclusivity in digital transactions.

    What Are the Possible Alternatives?
    One option is to implement a tiered charging system, where transactions up to ₹2,000 are free, followed by a minimal fee for amounts exceeding that limit. Another possibility is the annual cap model, which would allow a certain number of free transactions each year before any charges apply. Additionally, the government could consider a model where service fees are exclusively levied on larger merchants, ensuring that smaller businesses are not burdened by these costs.

    Good News for EPFO to allow instant PF withdrawals via UPI, ATMs

    The Employees’ Provident Fund Organisation (EPFO) is likely to introduce a major change that will allow its members to withdraw their provident fund (PF) instantly through UPI and ATMs by the end of May or early June 2025.

    With this update, employees will no longer have to go through long and time-consuming procedures to access their PF savings.

    The initiative is being implemented with the support of the Ministry of Labour and Employment and has received approval from the National Payments Corporation of India (NPCI).

    This move is expected to bring greater convenience to millions of EPFO members across the country.

    Sumita Dawra, Secretary at the Ministry of Labour and Employment, said employees will be able to withdraw up to Rs 1 lakh instantly.

    She mentioned that members will also be able to check their PF balance directly on UPI platforms and transfer funds to their preferred bank accounts without delays.

    This will make it easier for employees to access their money in times of need.

    Currently, withdrawing PF funds involves submitting online claims and waiting for approvals, which can take several days or even weeks.

    Read more at: EPFO 2025 Update: Revisions and New Services for Subscribers

    However, with the upcoming UPI integration, withdrawals will become instant and hassle-free.

    Employees will not only be able to withdraw funds quickly but also check their balances and make transactions instantly.

    EPFO is also expanding the reasons for which members can withdraw their PF savings. Apart from medical emergencies, employees will now be able to withdraw funds for housing, education, and marriage.

    This step aims to give more financial flexibility to employees. “EPFO has made significant improvements in its digital infrastructure by integrating over 120 databases,” Dawra said.

    “These efforts have reduced claim processing time to just three days, with 95 per cent of claims now being processed automatically. Further upgrades are also in progress to make the system even more efficient,” she stated.

    Pensioners have also benefited from EPFO’s digital initiatives. Since December 2024, around 78 lakh pensioners have been able to access their funds from any bank branch without restrictions.

    Earlier, withdrawals were allowed only from specific bank branches.

    Read more at: Epfo pension withdrawal new rules

    NPCI issues new guidelines requiring banks and UPI apps to update mobile number records weekly from April 1, 2025

    The National Payments Corporation of India (NPCI) has recently issued a new directive aimed at banks, UPI payment apps (PSPs), and third-party UPI service providers concerning the usage of numeric UPI IDs. This initiative seeks to enhance interoperability, boost user convenience, and minimize errors related to changes in mobile numbers during UPI transactions. All UPI service providers are mandated to adhere to these fresh guidelines by March 31, 2025.

    Key Highlights of the Directive

    In a press release dated March 3, 2025, NPCI emphasized the necessity for banks and PSPs to utilize the Mobile Number Revocation List/Digital Intelligence Platform (MNRL/DIP) and to regularly update their databases, at least weekly. This proactive approach to managing recycled or churned mobile numbers aims to significantly reduce errors in transactions that arise from changes in user phone numbers.

    Who Needs to Comply?

    This directive is principally directed at banks, UPI payment apps, and third-party UPI service providers who are involved in handling UPI transactions.

    What Changes from April 1, 2025?

    Starting April 1, 2025, banks and UPI apps will be required to:

    • Regularly check and update their mobile number records to avoid errors stemming from recycled or changed mobile numbers.
    • Seek clear and explicit consent from users before assigning or updating their numeric UPI IDs. Users will be defaulted to an opt-out status, and must actively opt-in to utilize this feature. Notably, consent requests cannot occur during transactions to prevent confusion.

    Additionally, if the NPCI system delays in verifying a Numeric UPI ID, UPI apps may temporarily address the issue internally; however, these occurrences must be reported to the NPCI on a monthly basis for better transparency.

    Understanding Recycled or Churned Numbers

    According to guidelines from the Department of Telecommunications (DoT), mobile numbers that are disconnected may be reallocated to new subscribers after a gap of 90 days. Typically, if a subscriber does not make any calls, send texts, or use data for three months, the number is deactivated by the telecom service provider. Subsequently, these operators reassign such mobile numbers to other subscribers, which are termed recycled or churned numbers.

    With the new guidelines, UPI apps are now obligated to seek user consent regarding whether they wish to seed or port their UPI number. A UPI number serves as the bank-verified phone number that acts as an identifier for the UPI ID, allowing users to receive payments regardless of the app being used.

    Previously, explicit consent was not required; however, moving forward, obtaining consent becomes essential. Routine updates from the PSP or bank will ensure the accurate mapping of UPI identities, preventing erroneous transaction routing while simultaneously improving user security.

    Reporting Requirements

    All UPI banks and applications must comply with these regulations by March 31, 2025. Effective from April 1, 2025, banks and UPI apps will also be obligated to share monthly reports with the NPCI concerning their management of Numeric UPI IDs.

    Conclusion

    These updates are designed to streamline UPI transactions by making them smoother, safer, and more user-friendly. By addressing errors commonly linked to mobile number changes and increasing transparency within UPI payments, the NPCI’s new guidelines herald a promising future for digital transactions in India.

    UPI Will Stop Working for Google Pay, PhonePe, and Paytm Users with Inactive Numbers

    Google Pay, PhonePe, and Paytm Users: UPI Services to be Affected from April 1

    Beginning April 1, new regulations will impact users utilizing UPI through platforms such as Google Pay, PhonePe, and Paytm. The National Payment Corporation of India (NPCI) has announced that mobile numbers associated with UPI will be removed from bank accounts if they have remained inactive for an extended period. Consequently, if your bank account is linked to an inactive mobile number, it may get deleted, leading to potential issues when attempting UPI transactions.

    Reasons Behind the Decision

    The NPCI’s decision arises from the increasing concerns over cybercrime. They noted that inactive mobile numbers can create technical complications within the banking sector and UPI systems. Should telecom companies assign these inactive numbers to new users, it heightens the risk of fraudulent activities. The government’s duty is to ensure the safety of its citizens and protect them from such vulnerabilities.

    Maintaining an active mobile number linked to your bank account is essential for seamless UPI transactions. This number acts as a critical identifier during payments, guaranteeing that funds are dispatched to the correct recipient. An inactive mobile number that has been reassigned could result in failed transactions or erroneous payments.

    Recommended Actions

    If you possess a mobile number connected to your bank account that is currently inactive or has not been recharged in some time, it is advisable to verify with your telecom provider (such as Jio, Airtel, Vi, or BSNL) to ensure the number remains active under your name. If it is inactive, you should promptly reactivate it or update your bank account with a new mobile number.

    To maintain accurate records, the NPCI has mandated that banks and UPI service providers review their records of inactive mobile numbers weekly. This initiative will ensure that any non-active numbers are purged from the banking system starting April 1.

    New UPI Incentive Scheme 2025

    Union Cabinet chaired by the Prime Minister Shri Narendra Modi today approved the ‘Incentive Scheme for promotion of low-value BHIM-UPI transactions Person to Merchant (P2M)’ for the financial year 2024-25 in the following manner:

    i. The incentive scheme for promotion of low-value BHIM-UPI transactions (P2M) will be implemented at an estimated outlay of 1,500 crore, from 01.04.2024 to 31.03.2025.

    ii. Only the UPI (P2M) transactions upto 2,000/- for Small Merchants are covered under the scheme.

    CategorySmall MerchantLarge Merchant
    Up to Rs. 2kZero MDR / Incentive (@0.15%)Zero MDR / No Incentive
    Over Rs. 2kZero MDR / No IncentiveZero MDR / No Incentive

    iii. Incentive at the rate of 0.15% per transaction value will be provided for transactions upto Rs.2,000 pertaining to category of small merchants.

    iv. For all the quarters of the scheme, 80% of the admitted claim amount by the acquiring banks will be disbursed without any conditions.

    v. The reimbursement of the remaining 20% of the admitted claim amount for each quarter will be contingent upon fulfilment of the following conditions:

    a) 10% of the admitted claim will be provided only when the technical decline of the acquiring bank will be less than 0.75%; and

    b) The remaining 10% of the admitted claim will be provided only when the system uptime of the acquiring bank will be greater than 99.5%.

    Benefits:

    • Convenient, secure, faster cash flow, and enhanced access to credit through digital footprints.

    • Common citizens will benefit from seamless payment facilities with no additional charges.

    • Enable small merchants to avail of UPI services at no additional cost. As small merchants are price-sensitive, incentives would encourage them to accept UPI payment.

    • Supports the Government’s vision of a less-cash economy through formalizing and accounting the transaction in digital form.

    • Efficiency gain- 20% incentive is contingent upon banks maintaining high system uptime and low technical decline. This will ensure round-the-clock availability of payment services to citizens.

    • Judicious balance of both the growth of UPI transactions and the minimum financial burden on the Government exchequer.

    Objective:

    • Promotion of indigenous BHIM-UPI platform. Achieving the target of 20,000 crore total transaction volume in FY 2024-25.

    • Supporting the payment system participants in building a robust and secure digital payments infrastructure.

    • Penetration of UPI in tier 3 to 6 cities, especially in rural & remote areas by promoting innovative products such as feature phone based (UPI 123PAY) & offline (UPI Lite/UPI LiteX) payment solutions.

    • Maintain a high system uptime & minimize technical declines.

    Background:

    Promotion of digital payments is an integral part of the Government’s strategy for financial inclusion and provide wide-ranging payment options to the common man. The expenditure incurred by the digital payment industry while providing services to its customers / merchant is recovered through the charge of Merchant Discount Rate (MDR).

    As per RBI, MDR upto 0.90% of transaction value is applicable across all card networks. (for Debit cards). As per NPCI, MDR upto 0.30% of transaction value is applicable for UPI P2M transaction. Since January 2020, to promote digital transActions, MDR was made zero for RuPay Debit Cards and BHIM-UPI transactions through amendments in section 10A in the Payments and Settlement Systems Act, 2007 and section 269SU of the Income-tax Act, 1961.

    In order to support the payment ecosystem participants in effective delivery of services, “Incentive scheme for promotion of RuPay Debit Cards and low-value BHIM-UPI transactions (P2M)” has been implemented with due approval by the Cabinet. Year-wise incentive payout by the Government (in Rs. crore) during the last three financial years:

    Financial YearGol PayoutRuPay Debit CardBHIM-UPI
    FY2021-221,389432957
    FY2022-232,2104081,802
    FY2023-243,6313633,268

    The incentive is paid by the Government to the Acquiring bank (Merchant’s bank) and  thereafter shared among other stakeholders: Issuer Bank (Customer’s Bank), Payment Service Provider Bank (facilitates onboarding of customer on UPI app / API integrations) and App Providers (TPAPs).

    PF UPI WITHDRAWAL RULES 2025

    The Employees’ Provident Fund Organisation (EPFO) is set to modernize its withdrawal process by introducing UPI-based transactions. This move promises to significantly speed up access to your PF funds. While the full implementation details are still forthcoming, here’s a breakdown of the anticipated rules and requirements for PF UPI withdrawals.   

    Key Highlights: 

    • EPFO to allow its members to withdraw their PF money through UPI
    • Subscribers can get PF funds directly into their accounts
    • This feature is likely to be expected to roll out by May or June this year

    Key Points and Expected Conditions:

    • KYC Compliance is Essential:
    • Active UAN:
      • Your Universal Account Number (UAN) must be active and in good standing.
    • Valid UPI ID:
    • Withdrawal Eligibility:
      • The fundamental rules regarding when you can withdraw from your EPF account will still apply. These include:
        • Retirement.
        • Unemployment for a specified period.
        • Partial withdrawals for specific reasons (medical emergencies, home loans, etc.).   
      • It is important to understand that the introduction of UPI is a new method of transfer, not a change to the eligibility of withdrawal.
    • Authentication:
      • UPI transactions involve secure authentication, likely including OTPs (One-Time Passwords) sent to your registered mobile number.   
    • EPFO Guidelines:
      • The EPFO will release detailed guidelines and instructions once the UPI withdrawal system is fully implemented. It’s crucial to follow these official instructions.   
    • Source: Click Here

    Disclaimer:  Every effort has been made to avoid errors or omissions in this material. In spite of this, errors may creep in. Any mistake, error or discrepancy noted may be brought to our notice which shall be taken care of in the next edition. In no event the author shall be liable for any direct, indirect, special or incidental damage resulting from or arising out of or in connection with the use of this information.

    EPF WITHDRAWAL VIA UPI AND ATMS COMING SOON

    The Employees’ Provident Fund Organisation (EPFO) is poised to revolutionize the way members access their hard-earned savings. In a move designed to enhance convenience and speed, plans are underway to introduce EPF withdrawals through UPI and ATMs. This modernization effort promises to streamline the process and provide members with instant access to their funds.

    The Need for Change:

    • The current EPF withdrawal process, while functional, has faced criticism for its lengthy processing times and high rate of claim rejections.
    • Recognizing these challenges, the EPFO is taking proactive steps to modernize its systems.   

    Key Developments:

    UPI-Based Withdrawals:

    • The Employees’ Provident Fund Organisation (EPFO) is in discussions with the National Payments Corporation of India (NPCI) to implement UPI-based EPF withdrawals.   
    • This initiative aims to provide EPF members with instant access to their funds using popular UPI platforms like Google Pay, PhonePe, and Paytm.   
    • This is being done to help speed up the withdrawal process, and to reduce the amount of rejected claims.   

    ATM Withdrawals:

    • As part of the EPFO 3.0 initiative, plans are also underway to enable EPF withdrawals through ATMs.   
    • This will further enhance accessibility and convenience for EPF members.

    Important Considerations:

    • It is important to ensure that your KYC details are up to date on the EPFO portal.
    • Aadhaar and PAN should be linked with your EPFO account.   
    • A valid UPI ID linked to a bank account is required for UPI withdrawals.   
    • It is important to remember that these are plans for the future. As with all things, time lines can change.

    The introduction of UPI and ATM withdrawals aims to streamline the process, provide faster access to funds, and reduce claim rejections.  

    Disclaimer:  Every effort has been made to avoid errors or omissions in this material. In spite of this, errors may creep in. Any mistake, error or discrepancy noted may be brought to our notice which shall be taken care of in the next edition. In no event the author shall be liable for any direct, indirect, special or incidental damage resulting from or arising out of or in connection with the use of this information.

    Simplified EPF Withdrawal: Now Available Through UPI

    EPFO to Integrate with UPI for Smooth Claim Processing

    The executive committee of the Employees’ Provident Fund Organisation’s (EPFO) Central Board of Trustees (CBT) has approved a plan to integrate its operations with the United Payment Interface (UPI), aiming to facilitate seamless processing of claims by subscribers.

    In a recent meeting, the CBT was briefed on the framework that will allow subscribers to withdraw their provident fund claims through UPI platforms. A final approval for this framework is expected to be granted during the upcoming CBT meeting.

    An official has indicated that “by late April or early May, the facility for withdrawal of claims through UPI will become functional.” The National Payment Corporation of India (NPCI) is currently assessing the technical aspects of this integration and is prepared to execute the plan.

    At present, the EPF is focused on developing a centralized database intended for a streamlined payment system within the EPFO. This database is anticipated to be operational by the end of March and will store all subscriber records in one place, even if they change locations. An official explained, “The centralized database is necessary for withdrawal of claims through UPI. The moment it’s done, the feature (UPI withdrawal) will be rolled out.”

    Once the EPF is connected to UPI, subscribers will be able to conveniently access their claim amounts via a digital wallet. Over the past seven months, the EPFO has implemented significant reforms aimed at improving the ease of living for members, enhancing pension services, streamlining provident fund (PF) claim processing, and upgrading its IT systems.

    “These reforms have enhanced service delivery for millions of EPF members and pensioners, with further improvements expected soon,” stated Labour Secretary Sumita Dawra.

    In the fiscal year 2025 to date, the EPFO has processed claims for over 50 million subscribers, marking the highest number ever, with more than Rs 2.05 lakh crore disbursed. In comparison, FY24 had 44.5 million claims settled, totaling Rs 1.82 lakh crore.

    UPI के ज़रिए EPF निकासी: आप कब निकाल सकते हैं पैसे? शर्तें और प्रस्ताव देखें

    UPI के ज़रिए EPF निकासी: कर्मचारी भविष्य निधि संगठन (EPFO) अपने ग्राहकों के लिए EPF निकासी को आसान बनाने पर काम कर रहा है। संगठन कथित तौर पर एक ऐसी सुविधा शुरू करने की योजना बना रहा है जो उपयोगकर्ताओं को GPay, PhonePe और Paytm जैसे UPI प्लेटफ़ॉर्म के ज़रिए सीधे अपने कर्मचारी भविष्य निधि (EPF) दावों को निकालने की अनुमति देगा।

    इस पहल का उद्देश्य फंड ट्रांसफर प्रक्रिया को तेज करना है, जिससे सब्सक्राइबर्स के लिए यह आसान और तेज़ हो जाए। वर्तमान में, निकासी बैंक ट्रांसफर के माध्यम से की जाती है, जिसमें कई दिन लग सकते हैं। फाइनेंशियल टाइम्स की एक रिपोर्ट के अनुसार, प्रस्तावित UPI एकीकरण के साथ, सदस्य की लिंक की गई UPI आईडी पर तुरंत फंड ट्रांसफर हो जाएगा।

    एफई रिपोर्ट के अनुसार, ईपीएफओ वर्तमान में कार्यान्वयन विवरण को अंतिम रूप देने के लिए भारतीय राष्ट्रीय भुगतान निगम (एनपीसीआई) के साथ चर्चा कर रहा है। संगठन ने योजना के लिए एक खाका तैयार किया है और अगले 2-3 महीनों के भीतर इस सुविधा को लॉन्च करने का लक्ष्य रखा है।

    वर्तमान में, ईपीएफओ सदस्य बैंक खाते के हस्तांतरण के माध्यम से अपना धन निकालते हैं, जिसके लिए प्रक्रिया में कुछ दिन लग सकते हैं। नई प्रणाली यूपीआई-आधारित लेनदेन को सक्षम करेगी, जिससे सदस्य की लिंक की गई यूपीआई आईडी में तत्काल धन हस्तांतरण की अनुमति मिलेगी।

    इस कदम से विशेष रूप से उन कर्मचारियों को लाभ होगा जिन्हें वित्तीय आपात स्थिति के दौरान अपनी पीएफ बचत तक त्वरित पहुंच की आवश्यकता होती है।

    चालू वित्त वर्ष 2024-25 में अब तक ईपीएफओ ने 7.4 करोड़ से अधिक ग्राहकों के साथ 50 मिलियन से अधिक दावों का निपटारा किया है और 2.05 लाख करोड़ रुपये से अधिक का वितरण किया है।

    ईपीएफ निकासी के लिए क्या आवश्यकताएं हैं?

    यदि आप निम्नलिखित में से कोई भी आवश्यकता पूरी करते हैं तो आप अपनी ईपीएफ राशि निकाल सकते हैं:

    1. सेवानिवृत्ति के समय (58 वर्ष की आयु पर या उसके बाद)।

    2. यदि दो महीने तक बेरोजगार रहें।

    3. निर्दिष्ट सेवानिवृत्ति आयु से पहले मृत्यु।

    भविष्य निधि (पीएफ) खाताधारक अब अपने खाते की शेष राशि के 75% तक या अपने मूल वेतन और महंगाई भत्ते के तीन महीने के बराबर राशि, जो भी कम हो, के लिए ऑनलाइन निकासी दावे प्रस्तुत कर सकते हैं। यह निकासी प्रावधान एक गैर-वापसी योग्य अग्रिम है। कर्मचारी भविष्य निधि संगठन (ईपीएफओ) का लक्ष्य 72 घंटों के भीतर ऑनलाइन दावों को संसाधित करना है, जबकि ऑफ़लाइन दावों के निपटान के लिए 20 दिनों तक का समय लग सकता है।

    इसके अलावा, आप कुछ मामलों में अपनी पीएफ राशि निकाल सकते हैं (जिनका उल्लेख नीचे किया गया है)।

    पीएफ निकासी के कुछ नियम जो आपको अवश्य जानने चाहिए:

    चिकित्सा आपातकाल

    कोई भी पीएफ सदस्य अपने सदस्य, जीवनसाथी, माता-पिता या बच्चों की चिकित्सा आपात स्थिति के लिए धनराशि निकाल सकता है। निकासी की सीमा या तो कर्मचारी के हिस्से के बराबर ब्याज या मासिक वेतन (बेसिक + डीए) का 6 गुना है, जो भी कम हो।

    नये घर का निर्माण/खरीद

    न्यूनतम 5 वर्ष तक सेवा देने वाले कर्मचारी नए मकान के निर्माण या खरीद के लिए अपने पीएफ शेष का 90% निकालने के पात्र हैं।

    घर का नवीनीकरण

    घर के नवीनीकरण के लिए घर के निर्माण की तारीख से 5 साल बाद निकासी की जा सकती है। स्वीकार्य निकासी सीमा कर्मचारी के मासिक वेतन का 12 गुना है।

    गृह ऋण का पुनर्भुगतान

    कर्मचारी आवास ऋण के भुगतान के लिए अपने पीएफ शेष का 90% तक निकाल सकते हैं, बशर्ते कि उन्होंने कम से कम 3 वर्ष की सेवा पूरी कर ली हो।

    शादी

    सदस्य, भाई-बहन या बच्चों की शादी के लिए, न्यूनतम 7 वर्ष की सेवा वाले कर्मचारी अपने हिस्से का 50% ब्याज सहित निकाल सकते हैं।

    EPFO Plans UPI for EPF Claim Payouts

    Once integrated, claim amounts can be easily accessed by the subscribers via digital wallets, mention sources. This would minimise the processing time and lead to an enhanced user-friendly experience.

    Key Highlights: 

    UPI Integration:

    Timeline:

    • The EPFO is targeting to roll out this feature within the next 2 to 3 months.   

    Purpose:

    • This is part of the EPFO’s ongoing efforts to enhance efficiency and improve service delivery to its millions of subscribers.   
    • It’s designed to make accessing EPF funds more convenient and faster.

    Collaboration:

    • The EPFO is working with the National Payments Corporation of India (NPCI) to implement this feature on UPI platforms.   
    • Also the labour ministry is working with commercial banks and the RBI to update digital systems.

    Benefits:

    Employees’ Provident Fund Organisation (EPFO) members may soon be able to withdraw employee provident fund (EPF) claims via United Payment Interface (UPI) as the government aims for faster and seamless fund transfers.

    Disclaimer:  Every effort has been made to avoid errors or omissions in this material. In spite of this, errors may creep in. Any mistake, error or discrepancy noted may be brought to our notice which shall be taken care of in the next edition. In no event the author shall be liable for any direct, indirect, special or incidental damage resulting from or arising out of or in connection with the use of this information.

    UPI Pay big changes to come into effect before January 1

    The Reserve Bank of India (RBI) has increased the transaction limit for UPI 123Pay from ₹5,000 to ₹10,000, with NPCI instructing banks and service providers to comply. UPI 123Pay allows digital payments via feature phones without internet access, utilizing methods like IVR, missed calls, OEM apps, and sound technology. While the changes are effective immediately, NPCI has set a deadline of January 1, 2025, for full implementation.

    Key changes to come into effect before Jan 1, 2025.

    1. The transaction limit is to be raised from ₹5,000 to ₹10,000.

    2. Onboarding for these transactions to be implemented with Aadhaar OTP in UPI 123Pay.

    3. The members will collectively identify and tag UPI 123Pay transactions as per the rules given below:

    A.) New purpose code 86 is issued for UPI 123Pay transactions. All 123Pay transactions should be passed with purpose code 86 in the purpose=” “tag for financial and non financial transactions.

    B.) Initiation modes to be passed as per UPI procedural guidelines. Earlier allotted initiation mode =31 will be considered null and void.

    C.) Initiation channel

    On call based: <Tag name= “TYPE” value = “IVR”/>

    Feature phone based application: <Tag name = “TYPE” value = “FP”/>

    Missed call based: <Tag name = “TYPE” value = “MCP”/>

    Sound frequency based: <Tag name = “TYPE” value = “TONE”/>

    4. The members will implement UPI number functionality through integration with UPI numeric ID mapper.

    Apart from UPI 123Pay, RBI had raised the limit of UPI Lite wallet as well from ₹2,000 to ₹5,000 and each transaction limit from ₹500 to ₹1,000.

    RBI Governor Shaktikanta Das had then said that the limits were raised because UPI has changed India’s financial landscape significantly by making digital payments more accessible and inclusive through ongoing innovation. He also mentioned that these changes were done to further promote UPI adoption.

    RBI issues new big rules for domestic transaction from Nov 1

    The Reserve Bank of India (RBI) has rolled out a new framework for Domestic Money Transfer (DMT) in July 2024, targeting regulated enterprises. The updated guidelines focus on bolstering Know Your Customer (KYC) record standards and honing in on banking services and payment systems. These fresh directives come into effect as of November 1, 2024.

    The aim of the revised regulations is to enhance the security of domestic money transfers and ensure adherence to prevailing financial laws. In light of the increasing prevalence of cashless and digital transactions in India, the intention is to provide a robust and secure structure for money transfers.

    The alterations made to the existing framework were the product of a meticulous evaluation of various payment transfer services. As per a communication issued by the Reserve Bank of India to authorised payment system operators, remitting banks are now mandated to obtain and maintain a record containing the name and address of the beneficiary for cash disbursement. Moreover, every transaction initiated by a remitter must undergo validation through an additional factor of authentication (AFA).

    The RBI in its July circular said: “The framework for Domestic Money Transfer (DMT) was introduced in 2011, vide RBI circular DPSS.PD.CO.No.622/02.27.019/2011-2012 dated October 5, 2011. There has been significant increase in the availability of banking outlets, developments in payment systems for funds transfers, and ease in fulfilling KYC requirements etc., since then; and now users have multiple digital options for funds transfer. A review was recently undertaken of various services facilitated in the current framework.” 

    Key details

    1. Banks are required to maintain a record of the beneficiary’s name and address during cash transfers to promote transparency and accountability in financial transactions.
    2. Both Banks and Business Correspondents (BCs) are obligated to verify the remitter’s cell phone number and relevant documentation.
    3. Remitters will undergo registration process using an authenticated mobile phone number and a self-certified ‘Officially Valid Document’ (OVD) as per the guidelines set by the Reserve Bank of India (RBI).
    4. The new framework mandates remitting banks to keep track of the name and address of beneficiaries for cash pay-out services in order to enhance traceability and accountability in cash-based transactions.
    5. These measures have been implemented to strengthen the oversight and accountability in cash transactions.
    6. Additional authentication will be needed for each transaction.
    7. Remitting banks and their BCs must follow the Income Tax Act rules on cash deposits.
    8. Remitter banks must include the remitter’s details in the transaction message on systems like IMPS and NEFT.
    9. Cash-based remittance transactions must have a specific identifier in the message.
    10. For Cash Pay-out Service, the remitting bank has been asked to obtain and keep a record of the name and address of the beneficiary.

    Impact on customers

    > In order to utilise cash pay-in services, banks and business correspondents are required to register remitters with a verified cell phone number and a self-certified Officially Valid Document (OVD) in line with the Master Direction – Know Your Customer (KYC) Direction 2016.

    > This measure is implemented to strengthen identity verification procedures and mitigate the risks related to potential fraud incidents.

    > It is important to note that the updated guidelines do not apply to card-to-card transfers, as they will continue to be governed by the existing regulations specific to such transactions.

    Cash payout services

    Cash pay-out refers to transferring funds from bank accounts to beneficiaries who do not have a bank account. The process of cash pay-out involves transferring funds from bank accounts to individuals who do not have their own bank accounts. In 2011, the central bank issued a statement allowing banks to offer services that enable clients to transfer funds from their accounts for cash delivery to recipients without bank accounts at an ATM or through a designated agent known as a Business Correspondent. The maximum amount allowed for such transfers was increased from Rs. 5,000 to Rs. 10,000 per transaction, with a monthly cap of Rs. 25,000. 

    “Banks are permitted to provide services which facilitate transfer of funds from the accounts of their customers for delivery in cash to the recipients not having bank accounts at an ATM or through an agent appointed as Business Correspondent. It has been decided to raise the ceiling on the value of such transfers from Rs. 5,000 to Rs. 10,000 per transaction subject to the cap of Rs. 25,000 per month,” the RBI had said.

    RBI has announced important changes to the Unified Payments Interface (UPI)

    The Reserve Bank of India (RBI) has announced important changes to the Unified Payments Interface (UPI) to make digital payments easier and more accessible for everyone. The limit for UPI Lite transactions has been increased from ₹500 to ₹1,000, while the overall wallet limit for UPI Lite has been raised from ₹2,000 to ₹5,000.

    RBI Governor highlighted how UPI has changed India’s financial landscape, stating, “UPI has transformed India’s financial landscape by making digital payments accessible and inclusive through continuous innovation and adaptation. To further encourage wider adoption of UPI and make it more inclusive, it has been decided to enhance the per-transaction limit in UPI123Pay from ₹5,000 to ₹10,000, and to increase the UPI Lite wallet limit from ₹2,000 to ₹5,000 and per-transaction limit from ₹500 to ₹1,000.”According to the RBI’s Development and Regulatory Policies, these updates are part of a larger effort to make UPI products more widely used.

    UPI Lite: Previously, UPI Lite had a transaction limit of ₹500 and an overall wallet limit of ₹2,000, with the option for auto-replenishment. To expand its usability, the RBI has decided to raise the UPI Lite wallet limit to ₹5,000 and the per-transaction limit to ₹1,000. The framework enables small-value payments in offline digital modes, which includes UPI Lite, will be amended accordingly.

    UPI Transaction Limit Increased To Rs 5 Lakh

    NPCI has raised the UPI transaction limit to ₹5 lakh for sectors like tax payments, healthcare, education, and financial investments, effective September 16, 2024. This change enables high-value transactions through UPI, promoting digital payments across broader financial activities. However, the limit for peer-to-peer transfers remains at ₹1 lakh. Users should check with their banks to confirm the availability of the new limit.

    NPCI’s Planing to Eliminate OTPs and PINs for UPI Transactions

    Biometric Authentication for UPI Transactions: NPCI Explores Partnerships with Startups

    The National Payments Corporation of India (NPCI) is reportedly in talks with various startups to usher in a new era of biometric authentication for Unified Payments Interface (UPI) transactions. This potential collaboration aims to revolutionize the way users authenticate UPI payments, utilizing fingerprints for Android devices and face ID for iPhones, thereby replacing the current four or six-digit UPI PIN.

    According to sources familiar with the matter, as reported by MoneyControl, this development comes shortly after the Reserve Bank of India (RBI) suggested exploring alternative methods for additional factor authentication (AFA) in digital transactions, indicating a strong regulatory and industry shift towards enhanced security measures.

    These discussions between NPCI and startups primarily center around the financial and legal aspects of potential partnerships. Although both PIN and biometric authentication methods are expected to coexist initially, offering users multiple options for transaction verification, the move towards biometric authentication resonates with the RBI’s emphasis on more secure verification methods to combat financial fraud.

    Currently, the UPI employs a two-factor authentication system, comprising device binding through SMS as the primary factor, and the UPI PIN as the secondary factor for transaction confirmation. The incorporation of biometric authentication seeks to not only bolster security but also enhance the overall user experience of UPI transactions.

    While the specific timeline for the implementation of this groundbreaking change remains unclear, if realized, it has the potential to streamline the payment process and elevate the security standards for UPI transactions, fostering a more seamless and secure financial ecosystem for users across the board.

    RBI Proposes New Authentication Measures for Secure Digital Payments

    Reserve Bank of India Proposes New Guidelines for Digital Payment Security

    In a move to bolster the security of digital transactions, the Reserve Bank of India (RBI) has proposed new guidelines requiring additional authentication factors for digital payments. The draft guidelines, announced Wednesday, mandate that all digital payment transactions, excluding specific exemptions, must incorporate a dynamically created factor of authentication.

    “All digital payment transactions shall be authenticated with an additional factor(s) of authentication (AFA), unless exempted otherwise in this framework,” said the RBI.

    The RBI’s guidelines stipulate that, in addition to the current SMS-based one-time password (OTP), a dynamic authentication factor must be used. This factor, generated during the transaction and unique to each payment, is time-sensitive and cannot be reused. The central bank aims to reduce fraud by ensuring that authentication factors are only known to the genuine user.

    These measures will enhance security and prevent fraud, addressing issues where customers have been deceived into sharing OTPs, experts said.

    New Framework Scope

    The new framework will be applicable to all digital transactions except for card-present transactions, small value contactless payments up to Rs 5,000, e-mandates for recurring payments, and small value offline digital transactions. Payment system providers and participants, including banks and non-banks, will be required to comply with these guidelines within three months of their issuance.

    Under the proposed guidelines, all digital payment transactions—except for card-present transactions—must include a dynamically created authentication factor. This factor, generated at the time of payment and specific to each transaction, cannot be reused.

    The framework specifies that authentication factors may include:

    • Something the user knows (e.g., password, passphrase, PIN),
    • Something the user has (e.g., card hardware or software token),
    • Something the user is (e.g., fingerprint or other biometric data).

    The RBI allows issuers to adopt a risk-based approach to determine the appropriate authentication factor, considering factors such as customer risk profile, transaction value, and origination channel. Issuers must also obtain explicit customer consent before implementing any new authentication methods and provide a means for customers to deregister from these methods if desired.

    Exemptions and Additional Measures

    Certain transactions will be exempt from the additional factor of authentication requirement, including:

    • Small value card-present transactions up to Rs 5,000 at Point of Sale (PoS) terminals,
    • Transactions related to mutual fund subscriptions, insurance premiums, and credit card bill payments, up to Rs 1 lakh, and other categories up to Rs 15,000,
    • Utility payments through select Prepaid Instruments/NETC,
    • Small value digital payments up to Rs 5,000 in offline mode.

    Additionally, the RBI has mandated that issuers alert customers in near real time about eligible digital payment transactions, further safeguarding against unauthorized access.

    These new measures are poised to enhance the security of digital payments, instilling confidence in users and mitigating the risks associated with fraud. As digital transactions continue to evolve, proactive steps to fortify security are essential, and the RBI’s proposed guidelines mark a significant stride in this direction.

    India’s UPI Landscape: Market Share and Emerging Players in June

    Title: The Rise and Shifts in India’s UPI Landscape

    The dynamic Indian digital payments landscape continues to witness intriguing shifts and advancements, particularly in the domain of Unified Payments Interface (UPI). In June, leading platforms like PhonePe, Google Pay, and Paytm navigated through a period of varied performance, each contributing to the intriguing narrative of UPI’s evolution.

    The month of June saw a marginal decline in the total volume and value of transactions processed through UPI. Overall, UPI experienced a slight 1% dip in total transaction volume, settling at 13.9 billion, compared to 14 billion in May. Correspondingly, the transaction value also saw a thin margin reduction to Rs 20.07 lakh crore from Rs 20.45 lakh crore.

    According to data disclosed by the National Payments Corporation of India (NPCI), PhonePe spearheaded the UPI domain by processing 6.7 billion transactions worth Rs 10.09 lakh crore in June. Following closely, Google Pay and Paytm processed 5.1 billion transactions worth Rs 7.07 lakh crore and Rs 1.1 billion transactions worth Rs 1.2 lakh crore, respectively. Notably, PhonePe secured a 48.3% market share in UPI, trailed by Google Pay with a 36.7% share, and Paytm with almost 8% market share.

    Comparatively, in May, the scenario exhibited slightly different figures. PhonePe processed transactions worth Rs 10.33 lakh crore, while Google Pay and Paytm’s transactions amounted to Rs 7.2 lakh crore and Rs 1.24 lakh crore, respectively. In terms of volume, the trio registered 6.8 billion, 5.2 billion, and 1.14 billion transactions, respectively.

    Despite confronting constraints on onboarding new users, Paytm sustained its market share for two consecutive months in the UPI ecosystem, staying resilient with the support of major banking partnerships including Axis Bank, HDFC Bank, State Bank of India (SBI), and YES Bank for UPI services.

    Notably, a wave of new players such as CRED, NAVI, Groww, Slice, and the recently launched Flipkart UPI have made discernible strides in the UPI arena. The emergence of CRED as the fourth largest player in processing UPI payments is particularly striking, as it eclipsed prominent entities like Amazon Pay, WhatsApp, and BHIM, processing over one-third of Paytm’s value of transactions in the last month.

    UPI’s growth trajectory has drawn attention, with NPCI’s chief operating officer (COO), Praveena Rai, highlighting the addition of up to 6 million new users every month. NPCI has also set a bold objective of achieving 1 billion transactions per day in the coming years, underscoring the profound potential and direction of UPI in India’s digital payments narrative.

    As the UPI landscape continues to evolve, these developments reflect the nuanced interplay between established giants and ambitious entrants, underscoring an enthralling saga of innovation and competition within the Indian digital payments sphere.

    Disclaimer: Bareback Media has recently raised funding from a group of investors. This shall, however, not influence our reporting or coverage in any manner whatsoever.

    New SMS Alert Limits for UPI Transactions at HDFC Bank

    HDFC Bank has notified its customers through email and SMS about the implementation of new limits on SMS alerts for UPI debit and credit transactions, effective from June 25, 2024. Customers will now only receive SMS updates for transactions above Rs 100 for money sent/paid and Rs 500 for money received. Meanwhile, customers will continue to receive email alerts for all UPI transactions.

    New Limit for SMS Alerts for UPI Transactions

    The new limit for SMS alerts for UPI transactions at HDFC Bank is transactions above Rs 100 for money sent/paid and Rs 500 for money received.

    According to the communication sent by HDFC Bank:
    “Starting from 25th June, 2024:

    • Email Alerts: Customers will continue to receive email alerts for all UPI transactions.
    • SMS Notifications: Customers will now only receive updates for transactions above Rs 100 for money sent/paid and Rs 500 for money received.”

    How to Register for Email Alerts for All UPI Transactions

    • Step 1: Click on this link
    • Step 2: Enter your registered mobile number
    • Step 3: Verify using DoB, PAN, or Customer ID and click on “Get OTP.”

    How to Update Contact Details at HDFC Bank Branch

    • Step 1: Obtain the common application form change form from the website or any HDFC Bank branches.
    • Step 2: Fill in the details and visit the nearest branch along with a photo ID proof.

    How to Deactivate Insta Alerts

    • Step 1: Log in to NetBanking using your Customer Identification Number and NetBanking Password.
    • Step 2: Click on “Insta Alerts” at the top right-hand corner of the page.
    • Step 3: Select the account number for which you wish to deregister the alerts.
    • Step 4: Choose the type of alerts and click on “delete.”
    • Step 5: Once the alerts are selected, click on “confirm.” The alerts will then be deregistered for the same.

    HDFC Bank Charges

    As per the HDFC Bank website, effective from 1st Jan’22, revised charges for InstaAlert services via Email and SMS are applicable. Customers previously paying Rs. 3 per quarter for InstaAlert SMS service will now pay only 20 paise + GST per SMS. Email alerts will remain free.

    Modification or Unsubscription of the Service

    • NetBanking: Go to ‘InstaAlert Registration’ at the top of the screen.
    • Mobile Banking App: Access the “Your Profile” section.

    SMS Banking

    SMS Banking allows you to conduct banking transactions on your mobile phone via SMS. Send your query to 7308080808 from your registered mobile number to receive your response.

    Registration Process

    Send “Register [Space] Last 4 digits of customer ID [Space] Last 4 digits of account number” to 7308080808.

    India Launches RuPay/UPI Connectivity with Mauritius and Sri Lanka

    Honorable Prime Minister of India, Honorable Prime Minister of Mauritius andHonorable President of Sri Lanka witnessed the launch of India’s RuPay / UPI connectivity with Mauritius and Sri Lanka

    on’bPrime MinisterIndia, Shri Narendra Modi, Hon’ble Prime Minister ofMauritius, Mr. Pravind Kumar Jugnauth, and Hon’ble President of Sri Lanka Mr. RanilWickremesinghe today witnessed the virtual launch of RuPay cards and UnifiedPayments Interface (UPI) connectivity between India and Mauritius, as well as UPIconnectivity between India and Sri Lanka. Reserve Bank of India Governor, ShriShaktikanta Das, Bank of Mauritius Governor, Mr. Harvesh Seegolam, and CentralBankSri Lanka Governor, Dr. P. Nandalal Weerasinghe were also presenttheoccasion.

    1. With this connectivity,Indian traveller to Mauritius will be able to pay a merchantin Mauritius using UPI. Similarly, a Mauritian traveller will be able tothe same inIndia using the Instant Payment System (IPS) app of Mauritius. Further, with theadoption of RuPay technology, the MauCAS card scheme of Mauritius will enablebanks in Mauritius to issue RuPay cards domestically. Such cards can be used atATMs and PoS terminals locallyMauritius as well as in India. With this, Mauritiusbecomes the first country outside Asia to issue cards using RuPay technology. IndianRuPay cards would also be accepted at ATMs and PoS terminals in Mauritius.
    2. The digital payments connectivity with Sri Lanka will enable Indian travellers tomake QR code-based payments at merchant locations in Sri Lanka using their UPIapps.
    3. These projects have been developed and executed by NPCI International PaymentsLimited (NIPL) along with partner banks / non-banks from Mauritius and Sri Lanka,under the guidance and support of Reserve Bank of India. The Bank of Mauritius andthe Central Bank of Sri Lanka have also played an important role in making thesepossible. The above facilities have been made operational through select banks / nonbanks / Third Party Application Providers in India, Mauritius and Sri Lanka. Goingforward, these facilities will be scaled up.
    4. The collaborations on India’s digital payments connectivity with Mauritius andaLanka through UPI and RuPay will deepen financial integration and strengthen thelong historical, cultural, and economic relations of India with Mauritius and Sri Lanka.

    India Launches Unified Payments Interface (UPI) at the Iconic Eiffel Tower

    India formally launches the Unified Payments Interface (UPI) at the iconic Eiffel Tower in Paris.

    Making the announcement, the Indian Embassy in France terms it as part of Prime Minister narendramodi’s vision of taking UPI, global.

    The UPI was formally launched at the Republic Day reception held in France.

    The UPI is India’s mobile-based payment system developed by the National Payments Corporation of India (NPIL) in 2016.

    Big Update! UPI transaction limit regulations, individuals can now conduct payments via UPI up to ₹5 lakh per day

    Reserve Bank of India Governor Shaktikanta Das announced on Friday an increase in the transaction limits for specific categories within the Unified Payments Interface (UPI). Additionally, new limits for e-mandates concerning recurring payments were also announced.

    Under the updated UPI transaction limit regulations, individuals can now conduct payments via UPI up to ₹5 lakh per day, previously capped at ₹1 lakh, specifically for payments to hospitals and educational institutions.

    “A key highlight is the adjustment in the UPI limit for transactions involving hospitals and educational institutions, raising it from ₹1 lakh to ₹5 lakh. This targeted policy measure acknowledges sector-specific financial needs, contributing to the macroeconomic resilience of critical segments. This could potentially result in increased financial transactions and ease,” says Sheersham Gupta, Director and Senior Technical Analyst at Rupeezy, a trading platform.

    “Education expenses usually tend to be high and very time-bound. Increasing the UPI limit for education up to ₹5L means students and parents will be able to make immediate hassle-free cash payments without needing to resort to instruments such as demand drafts,” says Adhil Shetty, CEO, BankBazaar, a financial marketplace.

    In the August policy update, Das has proposed introducing conversational payments on UPI, enabling users to interact with an AI-powered system for secure transaction initiation and completion.

    This feature will be accessible on both smartphone and feature phone-based UPI platforms, initially supporting Hindi and English, followed by additional Indian languages.

    The RBI had also raised the transaction limit of UPI Lite to ₹500 from ₹200. UPI Lite is accessible through various payment apps like Paytm, BHIM App, GooglePay, among others.

    Several banks, including 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, are already active on the UPI Lite platform.

    Big news for UPI payers

    The ‘Hello UPI’ product has been introduced at the Global Fintech Fest. Through this product, you will be able to make UPI payment only by voice. National Payment Corporation of India (NPCI) has introduced this feature for UPI. This feature currently supports Hindi and English languages. Local languages ​​will also be included in this soon. NPCI has also launched ‘Lite X’, using which rupee transactions can also be done offline.

    The National Payments Corporation of India (NPCI), at the Global Fintech Fest on Wednesday, has launched two conversational payments initiatives that are aimed at increasing convenience and accessibility for users.

    Hello UPI’ allows users to make payments by engaging in conversations with their smartphones — whether it’s splitting a restaurant bill, sending money to a friend, or settling utility bills.

    In an official statement, the NPCI said, “The introduction of conversational UPI payments will augment user experience by enabling them to make voice-enabled UPI payments via UPI Apps, telecom calls, and IoT devices in Hindi and English, and will soon be available in several other regional languages.

    The NPCI has partnered with the Bhashini programme, AI4Bharat at IIT Madras, to co-develop Hindi and English payment language models.
    The NPCI also launched ‘Bharat BillPay Connect’, an initiative aimed at effortless bill payments through conversations. Bharat BillPay Connect’ enables users to pay their bills through natural conversations with popular voice assistants like Alexa or via feature phones, smartphones, or merchant soundboxes. This initiative aims to cater to users across various tech proficiency levels, ensuring that digital bill payments are accessible to all.

    Customers can fetch and pay bills through voice commands on their smart home devices and get instant voice confirmation. Moreover, instant voice confirmations will be enabled for bill payments made at physical collection centers through payment soundbox devices,” the NPCI stated.

    E-Rupee Vs. UPI

    Here are the key differences between e-Rupee and UPI:

    Featuree-RupeeUPI
    TypeDigital currencyPayment system
    Issued byRBIBanks
    Requires bank accountNoYes
    SecurityToken based, More securePIN based, Less secure
    Can be used in remote areasYesNo
    HackabilityDifficultRelatively easier
    ConvenienceLess convenientMore convenient
    CostFreeNo cost for bank-to-bank transfers
    Charges may apply for other types of transactions (wallets etc.)
    AdoptionStill in the early stages of adoptionAlready widely adopted & deeply rooted into Indian Economy
    AuthorityClosed & Centralized (RBI)Open & Decentralized (Banks)
    TechnologyBlock chain basedOpen source API based
    Points of failureDistributed Ledger, Multiple points of failureCentralized ledger, Single point of failure