SUMMARY
Conversational Payments on UPI will enable users to engage in conversation with AI-powered systems to make payments
RBI has also proposed making small-ticket UPI payments using NFC through the UPI Lite on-device wallet
Further, the central bank has proposed to increase the transaction limit for digital payments in offline mode to INR 500 from INR 200
RBI (Reserve Bank of India) Governor Shaktikanta Das has proposed two new technologies for UPI, which would allow users to make small payments via conversation or tapping the phone on point-of-sale (PoS) devices via Near Field Communication (NFC).
First, the RBI has proposed conversational payments on UPI, which will enable users to engage in conversation with AI-powered systems to make payments. The facility will initially be available in Hindi and English and will subsequently be made available in more Indian languages. The RBI said it would issue Instructions to the NPCI for this shortly.
Second, the RBI has also proposed making small-ticket UPI payments using NFC through the UPI Lite on-device wallet. Further, the central bank has also proposed to increase the transaction limit for small-value digital payments in offline mode from INR 200 to INR 500 within the overall monthly limit of INR 2,000 per payment instrument.
“These initiatives will further deepen the reach and use of digital payments in the country,” said the RBI Governor in the monetary policy statement on August 10th.
NFC payments are a staple across many countries, including Japan and China. China’s WeChat, for instance, enables NFC payments across many channels via the app itself. The move will allow users to make small payments at places where they don’t have a debit or credit card on them.
UPI, however, has been offering a ‘tap to pay’ feature for a while. Last March, Google Pay and Pine Labs tied up to offer UPI tap-to-pay feature for NFC-enabled Android devices.
Conversely, UPI has also been gaining international recognition, as the National Payments Corporation of India (NPCI) has been in talks with as many as 30 countries interested in implementing the payments network. To that extent, the NPCI formed a new arm, NPCI International Payments Limited, to deploy the digital payments service globally.
This year, UPI was integrated with Singapore’s PayNow and France’s Lyra Network. UAE is also in talks with India to implement UPI shortly.
UPI bounced back strongly in July 2023 as transactions rose 6.6% month-on-month (MoM) to 996 Cr, worth INR 15.34 Lakh Cr in July 2023, up 4% MoM. In terms of transaction count, the July 2023 numbers corresponded to a year-on-year (YoY) growth of 58% from 628 Cr. Similarly, transaction value reported a YoY growth rate of 44% from INR 10.63 Lakh Cr in July 2022.
