Soon, new UPI feature to allow multiple users to use one account for transactions
Soon, new UPI feature to allow multiple users to use one account for transactions
The Reserve Bank of India (RBI) has introduced a new feature for the Unified Payments Interface (UPI) known as ‘Delegated Payments’. This feature will allow a primary account holder to grant permission to others to perform UPI transactions from their account, with the primary user setting transaction limits.
This innovation aims to expand UPI’s accessibility, particularly benefiting rural regions where families often share a single bank account. The RBI anticipates that this addition will significantly enhance UPI’s reach and usage across the nation, which currently has a user base of 424 million. The feature will enable primary users to define transaction limits for secondary users, thereby making digital transactions more secure and manageable.
Rahul Jain, CFO of NTT DATA Payment Services India, notes, “Allowing Delegated Payments can be a pivotal step in expanding the user base of Unified Payments Interface (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 authorization feature. This will also empower consumer confidence with easy, safe, and hassle-free financial transactions, thereby contributing towards a digitally empowered nation.”
The feature is expected to simplify UPI access for individuals who do not have their own bank accounts. Yashwant Lodha, Co-Founder of PayNearby, highlights that it will allow people to use a shared account for transactions, reducing the need for multiple accounts and aiding those who are less tech-savvy. Business Correspondents will help ensure the security and accuracy of these transactions.
Mohit Bedi, Co-Founder and Chief Business Officer of Kiwi, predicts that this feature could lead to a 25-30% increase in UPI transactions, as families and younger users take advantage of the new functionality.
In a related development, the RBI has increased the UPI transaction limit for tax payments from Rs 1 lakh to Rs 5 lakh per transaction. This change responds to the growing frequency and value of tax transactions and follows previous increases in UPI limits for various sectors, including capital markets and education.
Additionally, the RBI has announced the creation of a public repository for digital lending applications (DLAs). This repository will allow consumers to verify the legitimacy of digital lending services linked to regulated banks and non-banking financial companies (NBFCs). “The repository will be based on data submitted by the REs (without any intervention by RBI) directly to the repository and will get updated as and when the REs report the details, i.e., addition of new DLAs or deletion of any existing DLA,” the RBI stated.
