The Reserve Bank of India (RBI) has decided to revise upward the transaction limit for UPI 123Pay to Rs 10,000 from the previous Rs 5,000, thereby enabling users to make higher-value digital payments through feature phones. UPI 123Pay is designed for individuals who don’t access the internet on their mobiles and advises on possible ways of making payments electronically including among others.

• IVR (The Interactive Voice Response): is a system where users place and complete transactions by talking to a voice box that handles all transactions on behalf of the user.

• Missed Calls: This is a kind of payment where a user calls a particular number and cuts the phone without talking and that makes a certain payment.

• OEM Apps: Applications that allow users to make payments through a feature phone due to capability limitations.

• Sound Technology: This is the use of sound to transmit payment information between devices.

The National Payments Corporation of India (NPCI), the governing authority of UPI, has implemented this directive to banks and service providers. Although the amendment's entry into force is immediate, the complete transition to the enhanced maximum amount must be completed by January 1, 2025.

Key Changes:

• Increased Transaction Limit: The transaction limit for UPI 123Pay has been increased from Rs 5,000 to Rs 10,000.

•  Aadhaar OTP Authentication: To improve security, Aadhaar OTP authentication will be required for UPI 123Pay transactions.

•  Standardized Transaction Tagging: A new purpose code (86) has been introduced for UPI 123Pay transactions to enhance tracking and reporting.

•  Enhanced Initiation Modes: The system will support various initiation methods, including IVR, missed calls, feature phone apps, and sound-based technology.

•  UPI Number Functionality: Integration with the UPI numeric ID mapper will allow users to make payments using UPI numbers.

What is UPI 123Pay?

UPI 123Pay is a service that enables feature phone users to access UPI services without requiring an internet connection. It uses different methods, including IVR calls, missed calls, and sound-based technology, to initiate and process transactions.

Benefits of the Changes:

• Greater Convenience: The increased transaction limit and improved features will make digital payments easier for feature phone users.

• Stronger Security: Aadhaar OTP authentication will provide an additional layer of security for UPI 123Pay transactions.

• Better User Experience: Standardized tagging and multiple initiation options will simplify the payment process.

• These updates are expected to drive further adoption of digital payments in India, especially among underserved communities.