UPI Delegated Payments: Soon you can add family members, others to make UPI payments from your bank account
The Reserve Bank of India (RBI) has suggested the introduction of a “Delegated Payments” feature in UPI. Detailed guidelines for this will be provided soon.
The Reserve Bank of India (RBI) has proposed introducing a “Delegated Payments” facility in UPI, an individual (primary user) to allow another individual (secondary user) to make UPI transactions up to a limit from the former’s bank account.
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. Detailed instructions will be issued shortly.”
How this will benefit UPI users
“Allowing Delegated Payments can be a pivotal step in expanding the userbase 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,” said Rahul Jain – CFO, NTT DATA Payment Services India.
“This facility will allow individuals in rural areas to leverage UPI without needing to link their own bank accounts. Instead, they can access the UPI of an existing linked account, simplifying transactions and eliminating the need to maintain multiple accounts. For the less tech-savvy population, the assisted payment model can become a game changer. Business Correspondents who are well-versed in processing transactions, can provide crucial assistance by ensuring secured and accurate transactions. This will prevent inadvertent payments, making digital payments more accessible and user-friendly,” said Yashwant Lodha, Co-Founder, PayNearby, a branchless banking and digital network.
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 PSP before remitting funds using UPI and link his accounts. Note that registration of beneficiary is not required for transferring funds through UPI as the fund would be transferred on the basis of Virtual ID/Account+IFSC/Aadhaar Number. One can use more than one UPI application on the same mobile and link both same as well as different accounts.
Does the beneficiary also have to register for UPI for receiving funds?
In case of Virtual ID transaction, the beneficiary needs to have a Virtual ID and in turn be registered with UPI but in case of Account + IFSC or Aadhaar number, the beneficiary need not be registered for UPI. (Please check with your PSP and Issuing bank with regard to the services enabled on the App).
What are the different channels for transferring funds using UPI?
The different channels for transferring funds using UPI are:
a. Send/Collect through Virtual ID
b. Account Number + IFSC
c. 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 transfer using UPI?
For normal UPI the transaction limit is up to Rs 1 Lakh per transaction. For few specific categories of transaction in UPI like Capital Markets, Collections, Insurance, 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.
