The Reserve Bank of India (RBI) has proposed introducing a “Delegated Payments” facility in UPI. According to the RBI Governor Monetary Policy Meeting Statement on Developmental and Regulatory Policies, “The Unified Payments Interface (UPI) has a very large user base of 424 million individuals. There is, however, potential for further expansion of the user base. It is proposed to introduce “Delegated Payments” in UPI. “Delegated Payments” would allow an individual (primary user) to set a UPI transaction limit for another individual (secondary user) on the primary user’s bank account. This product is expected to add to the reach and usage of digital payments across the country.”
How this will benefit UPI users
“Allowing Delegated Payments can be a pivotal step in expanding the user base of UPI. Through this development, two family members can now use one bank account for making UPI payments. While we wait for more details, this initiative will further strengthen and enhance UPI payments, especially in rural areas, where financial literacy is less, and one bank account is used by one family. This mechanism will enhance user convenience by ensuring effective control through the usage limit authorisation feature. This will also empower consumer confidence with easy, safe, and hassle-free financial transactions,” said Rahul Jain – CFO, of NTT DATA Payment Services India.What is UPI?
Unified Payments Interface (UPI) is an instant payment system developed by the National Payments Corporation of India (NPCI), an RBI-regulated entity. UPI is built over the IMPS infrastructure and allows you to instantly transfer money between any two parties’ bank accounts. When you shop online, you can pay through UPI when you see UPI as a payment option. On clicking that, you will need to enter your Payment Address (eg – xyz@upi). Once entered, you will receive a collect request on your BHIM app. Enter your UPI-PIN here and your payment will be complete.
All payments are instant and 24/7, regardless of your bank’s working hours. A customer needs to register with his/her Payment Service Provider (PSP) before remitting funds using UPI and linking his accounts. Note that registration of beneficiary is not required for transferring funds through UPI as the fund would be transferred based on Virtual ID/Account+IFSC/Aadhaar Number.
One can use more than one UPI application on the same mobile and link both the same as well as different accounts.
Does the beneficiary also have to register for UPI to receive funds?
In the case of a Virtual ID transaction, the beneficiary needs to have a Virtual ID and in turn, be registered with UPI but in the case of Account + IFSC or Aadhaar number, the beneficiary need not be registered for UPI. (Please check with your PSP about the services enabled on the App).
What are the different channels for transferring funds using UPI?
UPI supports various fund transfer channels, including sending or collecting money via a Virtual ID, using an account number with the IFSC code, and through an Aadhaar number.
Can I put a stop payment request for funds transferred by UPI?
No, once the payment is initiated, it cannot be stopped.
What is the limit of fund transfers using UPI?
For normal UPI the transaction limit is up to Rs 1 Lakh per transaction. For a few specific categories of transaction in UPI like Capital Markets, Collections, Insurance, and Foreign Inward Remittances the transaction limit is up to 2 lakh and for Initial Public Offering and Retail Direct Scheme, the limit is up to Rs 5 lakh per transaction.
-Sneha Kulkarni, ET Online
