6 Major Updates in UPI Payments From January 1st 2024

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The Unified Payments Interface (UPI) in India became one of the mainstream payment methods this year with a record 8,375 crore transactions in FY22-23. In December 2023 alone, the UPI transactions racked up 17.4 lac crore of total value as per the RBI monthly bulletin. As we enter the year 2024, there have been some new rules and regulations starting as early as January 1st (today) made by the government and the RBI to bolster India’s digital transactions infrastructure.

Decoding New UPI Payments Rules & Regulations – January 2024

Kicking off from today, six new rules & regulations have swung into action. Here’s a summary of all the important points that you must know.

Deactivation of Inactive UPIs

6 Major Updates in UPI Payments From January 1st 2024

Depending upon how many UPI-enabled apps you use wiz. Google Pay, PhonePe, Paytm, bank apps, etc, you might be able to use half a dozen or more APIs. Of course, most users simply resort to one of a few UPIs but all of them seem too way off for a retail user. Thus, the National Payments Corporation of India (NPCI), which heads UPI, has asked payment apps to disable UPI IDs that are no longer active for more than a year. 

It means if any of your UPI hasn’t been used in 12 months, it will be deactivated. This step is to prevent potential misused or dormant accounts, a common type of financial attack, that scamsters might pull off without you ever knowing.

RBI adds a 4-hour time limit for payments to new users

Till yesterday, I could make a Rs 50,000/- transaction on Google Pay and the receiver would instantly get the payment in his/her account. With the new rules applicable from today i.e. 1st January (Monday), this won’t be the case. RBI has proposed a 4-hour time limit for first payments to a newly added recipient above INR 2,000/-.

The 4-hour window allows senders to reverse the payment or modify 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 the funds and security. However, it also means you won’t be able to own that product or service you purchase before the money is realized in the recipient’s account. Exactly how it remains subjective.

Increased Transaction Limits

NPCI has increased the maximum daily limit on UPI transactions up to INR 1,00,000/-. This is for standard and retail transactions. However, the limit has been increased from INR 1,00,000/- to INR 5,00,000/- for payment in healthcare facilities and educational institutions as per RBI’s mandate on December 8.

6 Major Updates in UPI Payments From January 1st 2024

Introduction of ATM UPI

ATMs have become far more common than a few years before as you can simply use your debit card or cash on mobile facilities to get hard cash. Starting January 1st, you will be able to use UPI to take out cash from ATMs as well. All you have to do is feed the amount, scan the QR code and the said amount (as per the limits) will be withdrawn from your bank account. Hitachi Payment Services has already begun providing ATM UPI via White Label ATM (WLA). You should find Hitachi’s ATMs near stations, especially in metropolises such as Mumbai.

Interchange Fee

Another major change in UPI payment rules commencing in early 2023 is the interchange fee. Any payment exceeding INR 2,000/- made to merchant payments conducted through online wallets will be subjected to an interchange fee of 1.1 percent. These will apply to certain merchants and won’t incur any additional charges to the customers.

The recipient’s name appears on-screen

Starting in early 2024, you will get to see the recipient’s original account holder’s name during UPI transactions. Up till today, users could set a different name than their actual bank account’s name or use someone else’s such as family’s. With the new regulations in place, you as a sender will be able to see the actual account holder’s name while making a UPI payment.

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