RBI Takes Stride Towards Digital Dominance: UPI Lite Transaction Limit Raised To Rs 500

New Delhi, 10th August 2023: The Reserve Bank of India (RBI) has put forth a proposal to augment the per transaction payment threshold for UPI Lite in offline mode, raising it from Rs 200 to Rs 500. Alongside this, the RBI has introduced several initiatives to further extend the utilization and accessibility of digital payments across the country.

Presently, there exists a per transaction limit of Rs 200 and an overall limit of Rs 2,000 per payment instrument for small-value offline digital payments, encompassing the National Common Mobility Card (NCMC) and UPI Lite. Responding to the demand for higher limits, RBI Governor Shaktikanta Das articulated, “To promote the adoption of this payment mode and to encompass a wider range of use cases, we are proposing an increase in the per transaction limit to Rs 500.”

It is important to note that the overall limit remains unchanged at Rs 2,000 to mitigate the risks linked to easing two-factor authentication. Detailed instructions in this regard will be issued shortly.

In the pursuit of leveraging emerging technologies to enrich the digital payment experience, Governor Das proposed the introduction of ‘Conversational Payments’ on UPI. This innovative feature would enable users to interact with AI-powered systems to initiate and complete payments. Additionally, the RBI plans to implement offline payments on UPI through near-field communication (NFC) technology, using the ‘UPI-Lite’ on-device wallet.

UPI has revolutionized India’s digital payment landscape due to its user-friendly approach, security, real-time processing, and evolving features. The incorporation of AI-driven conversational instructions holds great potential in enhancing the ease of use and expanding the reach of UPI.

To facilitate this, an avant-garde payment mode termed ‘Conversational Payments’ on UPI will be introduced, enabling users to seamlessly interact with AI systems to carry out transactions securely. This feature will be accessible on both smartphone and feature phone-based UPI channels, thus contributing to the wider adoption of digital payments.

Initially launching in Hindi and English, this service will subsequently extend to other Indian languages. Furthermore, the RBI is also striving to accelerate small-value transactions on UPI. ‘UPI-Lite’, an on-device wallet introduced in September 2022, has successfully streamlined transaction processing, now handling over ten million transactions monthly.

The RBI intends to enhance UPI-Lite usage by enabling offline transactions via Near Field Communication (NFC) technology. This enhancement ensures swift transactions even in areas with weak or no internet/telecom connectivity. The RBI will issue guidelines to the National Payments Corporation of India (NPCI) in this regard.

Akash Sinha, CEO and co-founder of Cashfree Payments commended the RBI’s emphasis on promoting digital payments, especially through initiatives like ‘conversational payments’ and ‘offline capability’ on UPI. He emphasized that these advances are driving technological integration and propelling India’s prominence in global payment solutions.

Adelia Castelino, co-founder and managing director of payment aggregator In-Solutions Global, lauded the introduction of ‘conversational payments’ and the proposal to implement NFC technology for offline payments through UPI Lite. She noted the positive impact of raising the transaction limit for small-value payments, making UPI Lite a practical choice for day-to-day transactions and encouraging wider adoption of digital payments.