Synopsis of the News:
- RBI Governor Shaktikanta Das revealed a range of novel attributes for UPI during the Monetary Policy Committee (MPC) session held on Thursday, 10 August 2023.
- Conversational Payments and various other innovative features will be introduced to UPI in the near future.
- NPCI will explore integrating an AI chatbot like ChatGPT to facilitate user assistance during transactions.
- RBI has proposed a significant increase in the transaction cap for UPI Lite, escalating it from Rs. 200 to Rs. 500 for offline mode usage.
India’s favored digital payment method, UPI, is poised for a significant transformation, marked by a slew of fresh enhancements. Chief among these is the introduction of Conversational Payments, an innovative approach to conducting transactions through AI-driven dialogues.
However, the evolution doesn’t stop there. During the Monetary Policy Committee (MPC) assembly, RBI Governor Shaktikanta Das disclosed an array of additional features slated for incorporation into UPI. Here’s a condensed overview.
Conversational Payments with AI
With the aim of leveraging advanced technology to elevate digital payments, NPCI is set to implement ‘Conversational Payments’ within UPI. This novel feature empowers users to seamlessly converse with AI-backed systems for secure and convenient payment processing.
Accessible on both smartphones and feature phones, this development is anticipated to bolster digital adoption across the nation. The initial launch will support Hindi and English languages, with plans to expand to other Indian languages in the future. The RBI is expected to provide further guidelines to NPCI.
Although precise mechanics for conversational payments were not fully detailed, it’s likely that NPCI will explore integrating an AI chatbot like ChatGPT to facilitate user assistance during transactions.
Increased UPI Transaction Limit
RBI has also proposed a significant augmentation of the transaction cap for UPI Lite, escalating it from Rs. 200 to Rs. 500 for offline mode usage. Presently, small-value digital payments in offline mode, encompassing National Common Mobility Card (NCMC) and UPI Lite, adhere to a limit of Rs. 200 per transaction and Rs. 2,000 per payment instrument.
This mode, not mandating two-factor authentication, affords expedited, dependable, and touchless payment avenues for minor transactions and transit-related expenses.
“There have been demands for enhancing these limits. To encourage wider adoption of this mode of payments and bring in more use cases into this mode, it is now proposed to increase the per transaction limit to Rs. 500,” Das said.
Nonetheless, the comprehensive cap will remain at Rs. 2,000, serving to mitigate potential hazards linked to the relaxation of two-factor authentication. Shaktikanta Das also conveyed that the RBI will soon issue directives in this regard.
Further advancing the realm of UPI, Shaktikanta Das has introduced the concept of offline UPI payments utilizing near-field communication (NFC) technology within UPI Lite. This innovation streamlines payments by enabling users to simply tap their smartphones onto point-of-sale (PoS) terminals.
The Monetary Policy Committee (MPC) statement highlighted, “To foster UPI-Lite usage, the facilitation of offline transactions through NFC technology is proposed. This feature not only empowers digital retail payments in scenarios of weak or absent internet and telecom connectivity but also ensures expedited transactions with minimal refusals.”
Responses to these developments by NPCI underscore their potential to drive digitalization in rural and remote locales, concurrently enhancing the accessibility of seamless payment methods. These advancements are also anticipated to democratize financial services and payment mechanisms across the nation.
