6 Major Updates in UPI Payments From January 1st 2024،
The Unified Payments Interface (UPI) in India has emerged as one of the leading payment methods this year with a record 8,375 crore transactions in FY22-23. In December 2023 alone, UPI transactions accumulated 17.4 lac crore of total value according to the RBI monthly bulletin. As we enter the year 2024, new rules and regulations have been adopted from January 1 (today) by the government and the RBI to strengthen India's digital transactions infrastructure.
Decrypting the new rules and regulations for UPI payments – January 2024
As of today, six new rules and regulations have come into effect. Here is a summary of all the important points you need to know.
Disabling inactive UPIs
Depending on how many UPI-enabled apps you use, wiz. Google Pay, PhonePe, Paytm, banking apps, etc., you might be able to use half a dozen or more APIs. Of course, most users just resort to one of a few UPIs, but all of them seem too far away for a retail user. So, the National Payments Corporation of India (NPCI), which runs UPI, has asked payment apps to deactivate UPI identifiers that have not been active for over a year.
This means that if any of your UPIs have not been used for 12 months, it will be deactivated. This step aims to prevent potentially misused or inactive accounts, a common type of financial attack, that scammers could carry out without you knowing.
RBI adds 4-hour delay for payments to new users
Until yesterday, I could make a transaction of Rs 50,000/- on Google Pay and the recipient would instantly receive the payment in their account. With the new rules applicable from today, January 1 (Monday), this will no longer be the case. RBI has proposed a 4 hour time frame for first payments to a newly added recipient above INR 2,000/-.
The 4-hour window allows senders to cancel the payment or change it in case they sent the amount by mistake, to the wrong recipient, or simply to a scammer. This particular adds a layer of control over funds and security. However, this also means that you will not be able to own the product or service you purchase until the money is made into the recipient's account. Exactly how that remains subjective.
Increased transaction limits
NPCI has increased the maximum daily limit of UPI transactions up to INR 1,00,000/-. This applies to standard and retail transactions. However, the limit has been increased from INR 1,00,000/- to INR 5,00,000/- for payment in healthcare and educational institutions as per the RBI mandate dated December 8.
Introduction of ATM UPI
ATMs have become much more common than a few years ago because you can simply use your debit card or cash on mobile facilities to get cash. From January 1, you will also be able to use UPI to withdraw money from ATMs. Simply deposit the amount, scan the QR code and the said amount (subject to limits) will be withdrawn from your bank account. Hitachi Payment Services has already started providing UPI ATM through White Label Automated Teller Machines (WLA). You should find Hitachi ATMs near railway stations, especially in metro cities like Mumbai.
Interchange fees
Another major change in UPI payment rules starting in early 2023 is interchange fees. Any payment above INR 2,000 made on merchant payments made via online wallets will be subject to an interchange fee of 1.1 percent. These will apply to certain merchants and will not incur any additional costs for customers.
The recipient's name appears on the screen
Starting in early 2024, you will be able to see the name of the recipient's original account holder during UPI transactions. Until today, users could set a name different from their actual bank account name or use someone else's, such as their family's. With the new regulations in place, you, as the sender, will be able to see the real name of the account holder while making a UPI payment.
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