On August 10, 2023, the Reserve Bank of India (RBI) put forth a proposal to increase the per-transaction payment threshold for Unified Payments Interface (UPI) Lite in offline mode to Rs. 500 (US$ 6.04). In addition to this, the RBI introduced several measures with the intention of broadening the nation’s adoption of digital payments.
For small-value digital transactions conducted offline, the Reserve Bank had previously set limits at Rs. 200 (US$ 2.41) per transaction and Rs. 2,000 (US$ 24.15) overall per payment instrument. This pertains to transactions made via modes such as National Common Mobility Card (NCMC) and UPI Lite. These channels offer efficient and contactless payment solutions, particularly for routine small-value purchases and transit payments, eliminating the need for two-factor authentication during these transactions.
To address potential risks associated with relaxing the two-factor authentication process, the overall transaction limit of Rs. 2,000 (US$ 24.15) remains in place. Further guidelines on this matter will be issued soon, as mentioned by Mr. Shaktikanta Das, the RBI Governor.
In a bid to enhance the digital payment experience for users, the RBI intends to introduce “Conversational Payments” through UPI. This innovative feature would allow users to engage with AI-powered systems to conduct payments seamlessly. Additionally, the RBI plans to introduce offline payments on UPI utilizing Near Field Communication (NFC) technology via an “UPI-Lite” on-device wallet. This move aims to leverage new technologies and improve digital payment accessibility for users. The new channel will be accessible on both smartphone and feature phone-based UPI platforms, thereby contributing to the increased digital outreach across the country. The initial release will support Hindi and English languages, followed by the inclusion of other Indian languages at a later stage.
