RBI MPC Increases UPI 123Pay and UPI Lite Transaction Limits

The Reserve Bank of India (RBI) continues to drive India’s digital payment revolution by increasing the transaction limits for UPI 123Pay and UPI Lite. During the Monetary Policy Committee (MPC) 2024 meeting, Governor Shaktikanta Das announced this update aimed to enhance digital payments, especially for feature phone users.

As part of the RBI’s ongoing efforts to make digital payments more inclusive, the UPI 123Pay transaction limit has been raised from ₹5,000 to ₹10,000. UPI 123Pay, launched in March 2022, enables India’s 400 million feature mobile users to make UPI payments without needing a smartphone or internet access. Through UPI 123Pay, users can complete transactions via IVR, missed calls, app-based functionality, or proximity sound-based payments.

Similarly, the UPI Lite wallet limit has been increased from ₹2,000 to ₹5,000. UPI Lite is designed for small-value transactions and allows users to store money directly on their devices, enabling quicker payments without having to access bank servers for each transaction. The per-transaction limit for UPI Lite has also been increased from ₹100 to ₹500, making it even more convenient for everyday use.

These enhancements are expected to encourage more people to adopt digital payments, especially in rural areas, where feature phones are still widely used. The increase in transaction limits will also support small businesses and merchants, making it easier for them to accept digital payments.

In addition to these changes, the RBI had previously raised the limit for tax payments through UPI from ₹1 lakh to ₹5 lakh per transaction, further strengthening UPI’s role in everyday financial activities.

The RBI’s latest move reflects its commitment to driving digital payments growth and ensuring financial inclusion. UPI transactions are expected to reach 439 billion by 2028-29, highlighting the immense potential of digital payments in India. With initiatives like UPI 123Pay and UPI Lite, the RBI makes digital transactions more accessible, secure, and convenient for all.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.