Unified Payments Interface (UPI) – At a Glance

Particular	Details
Full Form	Unified Payments Interface (UPI)
Category	Real-Time Digital Payment System
Developed By	National Payments Corporation of India (NPCI)
Parent Organization	National Payments Corporation of India (NPCI)
Regulatory Authority	Reserve Bank of India (RBI)
Legal Framework	Payment and Settlement Systems Act, 2007
Launch Date (Pilot)	11 April 2016
Public Rollout	25 August 2016
RBI Governor at Launch	Dr. Raghuram G. Rajan
Vision Behind UPI	To create a single, interoperable, secure, and instant payment platform for all Indian banks.
Concept Developed By	NPCI in collaboration with RBI and member banks
Current NPCI MD & CEO	Dilip Asbe
Platform	Mobile-Based Payment Platform
Transaction Availability	24×7×365 (Including Weekends & Holidays)
Supported Transactions	Person-to-Person (P2P) and Person-to-Merchant (P2M)
Authentication Method	UPI PIN
Unique Identifier	Virtual Payment Address (VPA)
Primary Objective	Instant, secure, and cashless bank-to-bank fund transfers
Official Website	www.npci.org.in

Quick Facts

“One Platform – Multiple Bank Accounts.”
Instant bank-to-bank money transfer in seconds.
No need to share bank account number or IFSC code.
One of the world’s largest real-time payment systems.
Widely accepted in India and expanding internationally.

What is Unified Payments Interface (UPI)?

Unified Payments Interface (UPI) is a real-time digital payment system developed by the National Payments Corporation of India (NPCI) that enables instant money transfers between bank accounts through a mobile device.

UPI was launched in 2016 to provide a fast, secure, and simple method of making digital payments. It allows users to send and receive money 24 hours a day, 7 days a week, without visiting a bank.

One of the key features of UPI is the use of a Virtual Payment Address (VPA), which allows users to transfer money without sharing their bank account number or IFSC code. Users can also link multiple bank accounts to a single UPI-enabled mobile application, making transactions more convenient.

UPI supports person-to-person (P2P) and person-to-merchant (P2M) transactions, enabling payments for shopping, bill payments, online purchases, and fund transfers through mobile apps.

Today, UPI is one of the most widely used digital payment systems in India and has significantly contributed to the growth of digital payments, financial inclusion, and the country’s move towards a cashless economy. It is also accepted for merchant payments in several countries through international partnerships.

Benefits of UPI for Users

UPI provides several advantages to users by making digital payments faster, easier, and more secure.

1. 24×7 Availability

UPI services are available 24 hours a day, 7 days a week, including weekends and public holidays.

2. Single App for Multiple Bank Accounts

Users can link multiple bank accounts to one UPI-enabled application and manage all accounts from a single platform.

3. Secure Transactions with UPI ID

Payments can be made using a Virtual Payment Address (UPI ID), eliminating the need to share bank account numbers or IFSC codes.

4. Two-Factor Authentication

Every transaction is protected through two-factor authentication, ensuring a high level of security.

5. Instant Money Transfer

Funds are transferred instantly between bank accounts in real time.

6. Easy QR Code Payments

Users can make payments by simply scanning a QR code, making transactions quick and convenient.

7. No Need to Carry Cash

UPI enables completely cashless transactions, reducing dependence on physical currency.

8. User-Friendly Interface

UPI applications are simple to use, making digital payments accessible to people of all age groups.

9. Instant Complaint Registration

Users can raise complaints directly through the UPI mobile application without visiting the bank.

10. Wide Acceptance

UPI is accepted by millions of merchants, businesses, government services, and online platforms across India.

11. Low-Cost Transactions

Most UPI transactions are free or involve minimal charges, making it an economical payment option.

12. Safe and Reliable

UPI transactions are processed through the secure infrastructure of NPCI and are regulated by the Reserve Bank of India (RBI), ensuring safety and reliability.

Benefits of UPI for Merchants

UPI offers several benefits to merchants by making payment collection faster, safer, and more convenient.

1. Seamless Fund Collection

Merchants can collect payments instantly using a single UPI ID or QR code, making the payment process simple and efficient.

2. Access to a Wider Customer Base

Merchants can accept payments from customers who do not have credit or debit cards but use UPI-enabled banking applications.

3. Ideal for Online and Offline Businesses

UPI is suitable for both online and offline merchants, including websites, e-commerce platforms, retail stores, restaurants, and in-app payments.

4. Resolves Cash-on-Delivery (COD) Challenges

UPI simplifies Cash-on-Delivery (COD) collections by allowing customers to make secure digital payments at the time of delivery.

5. Supports Multiple UPI Apps

Customers can make payments using any UPI-enabled application, such as Google Pay (GPay), PhonePe, Paytm, BHIM, Amazon Pay, or any banking UPI app.

6. 24×7 Availability

Merchants can receive payments anytime, including weekends and public holidays, without any interruption.

Benefits of UPI for Banks

UPI provides several benefits to banks by improving the efficiency, security, and convenience of digital payment services.

1. Two-Factor Authentication

UPI uses two-factor authentication to ensure that every transaction is secure and authorized by the account holder.

2. Universal Application for Transactions

Banks can provide customers with a single UPI-enabled application that supports various types of financial transactions from one platform.

3. Leveraging Existing Infrastructure

UPI enables banks to utilize their existing banking infrastructure, reducing the need for major additional investments while expanding digital payment services.

4. Safer and Secure

UPI offers a safe and secure payment environment by using encrypted transactions and strong authentication mechanisms.

5. Enables Seamless P2P and Merchant Transactions

UPI allows banks to facilitate Person-to-Person (P2P) and Person-to-Merchant (P2M) transactions smoothly, ensuring instant fund transfers and digital payments.

Digital Foundation Behind UPI (Pillars of UPI)

The success of Unified Payments Interface (UPI) is built on India’s strong digital infrastructure. Several government initiatives and technological developments created the foundation that made UPI one of the world’s largest real-time payment systems.

1. JAM Trinity (The Core Foundation of UPI)

The JAM Trinity is the most important pillar behind the success of UPI. It consists of:

Jan Dhan Yojana (Financial Inclusion) – Provides bank accounts to millions of people.
Aadhaar (Digital Identity) – Offers a unique biometric identity for secure authentication.
Mobile Connectivity – Enables users to access banking and digital payment services through mobile phones.

Together, these three components made digital payments accessible to a large section of the population.

2. Pradhan Mantri Jan Dhan Yojana (PMJDY)

Launched to promote financial inclusion by providing bank accounts to every household.
Enabled millions of people to become part of the formal banking system.
Facilitated Direct Benefit Transfer (DBT) of government subsidies directly into beneficiaries’ bank accounts.
As of July 2025, more than 55.9 crore Jan Dhan accounts had been opened.

3. Aadhaar – Digital Identity

Aadhaar provides every resident with a unique biometric-based identity number.
Enables secure identity verification for banking and financial services.
Supports digital authentication required for various payment services, including UPI.
By June 2025, more than 142 crore Aadhaar numbers had been generated.

4. Mobile Connectivity

Rapid growth in smartphone usage made digital payments easily accessible.
Expansion of 4G and 5G networks improved internet connectivity across urban and rural India.
India achieved one of the world’s fastest 5G rollouts, with approximately 4.74 lakh 5G base stations covering almost all districts.

5. Affordable Internet

Low-cost mobile data made digital payments affordable for everyone.
The average cost of mobile data declined from ₹308 per GB (2014) to ₹9.34 per GB (2022).
Affordable internet encouraged widespread adoption of UPI and other digital payment services.
India has over 116 crore mobile users, providing a large digital payment user base.

6. Strong Digital Public Infrastructure

Secure banking systems, digital identity, mobile connectivity, and affordable internet together created a strong digital ecosystem.
This infrastructure supports fast, secure, and reliable real-time digital transactions across the country.

Outcome

These digital pillars transformed India’s payment ecosystem and enabled UPI to become the world’s largest real-time payment system, serving as a global model for digital finance, financial inclusion, and cashless transactions.

Recent Developments in UPI – Complete Overview

Development	Year / Launch Date	Purpose	Key Features	Importance
UPI 2.0	Launched on 16 August 2018	To improve the functionality, security, and user experience of UPI transactions.	• Allowed users to link Overdraft (OD) Accounts with UPI.• Introduced One-Time Mandate facility for pre-authorising future payments.• Enabled users to view and store invoices related to transactions.• Introduced AutoPay facility for recurring payments such as subscriptions, EMIs, insurance premiums, and utility bills.• Improved transaction transparency and security.	• Made UPI more useful for regular and automated payments.• Increased trust and convenience among users.• Expanded UPI beyond simple fund transfers.
Conversational Voice Payments	Introduced in 2024 at Global Fintech Fest	To make UPI payments easier through voice-based technology.	• Allows users to complete UPI transactions using voice commands.• Reduces dependency on typing and smartphone interfaces.• Supports natural language interaction.• Helps elderly users and people with limited digital literacy.	• Makes digital payments more accessible.• Promotes financial inclusion by simplifying payment methods.
UPI Lite	Introduced in 2022	To enable faster and easier small-value digital payments.	• Designed for low-value transactions.• Allows payments with limited or no internet connectivity.• Provides faster payment experience for daily purchases.• RBI increased the transaction limit to ₹1,000 per transaction.• Maximum wallet balance limit increased to ₹5,000.	• Reduces dependency on internet connectivity for small payments.• Improves convenience for daily transactions such as groceries and local payments.
UPI Vouchers (e-RUPI)	Introduced in 2021	To provide prepaid digital payment solutions for targeted payments.	• Allows users to send prepaid vouchers linked to a mobile number.• Can be used without transferring money directly to a bank account.• Useful for government schemes, employee benefits, healthcare, and gifting purposes.	• Ensures targeted delivery of benefits.• Improves transparency in digital payments.• Reduces misuse of funds.
UPI 123PAY	Launched in 2021	To provide UPI services to feature phone users and increase financial inclusion.	• Enables UPI payments without a smartphone.• Works through IVR (Interactive Voice Response), missed calls, feature phone apps, and sound-based payments.• Designed for rural areas and users with limited internet access.• Supports secure transactions through UPI PIN authentication.	• Brings digital payments to people without smartphones.• Expands the reach of UPI in rural and remote regions.
Increase in UPI Transaction Limit	Effective from 8 December 2023	To allow higher-value digital transactions through UPI.	• Transaction limit increased from ₹1 lakh to ₹5 lakh for selected categories.Applicable for:• Tax payments• Hospital payments• Educational institution payments	• Enables users to make large-value payments through UPI.• Reduces dependence on traditional banking methods for high-value transactions.

International Expansion of UPI

The international expansion of Unified Payments Interface (UPI) is an important step towards making India’s digital payment technology a global payment solution. The Reserve Bank of India (RBI) has identified cross-border payment connectivity as a key area under its Payments Vision 2025. Through cooperation with foreign countries, UPI is being expanded to enable faster, secure, and affordable digital payments across borders.

1. Global Acceptance of UPI

UPI is gradually being accepted outside India for merchant payments and digital transactions.

Countries Where UPI is Available for International Payments

UPI services have been introduced or enabled in countries including:

🇦🇪 United Arab Emirates (UAE)
🇫🇷 France
🇸🇬 Singapore
🇧🇹 Bhutan
🇲🇺 Mauritius
🇳🇵 Nepal
🇱🇰 Sri Lanka
🇶🇦 Qatar

Importance of Global Acceptance

Helps Indian travellers make digital payments abroad.
Reduces dependency on traditional international payment networks.
Provides faster and cost-effective payment solutions.
Promotes India’s digital payment infrastructure globally.
Strengthens India’s position in the fintech sector.

2. UPI Facility for Non-Resident Indians (NRIs)

UPI has been expanded to allow Non-Resident Indians (NRIs) to make payments in India using their overseas mobile numbers.

Countries Covered for NRI UPI Access

NRIs residing in countries such as:

Australia
Canada
France
Hong Kong
Malaysia
Oman
Qatar
Saudi Arabia
Singapore
UAE
United Kingdom
United States of America

can access UPI services through supported Indian bank accounts.

Benefits for NRIs

Easy payment of Indian bills and services.
Convenient transactions during visits to India.
Reduces the need for cash or international cards.
Provides secure and instant digital payments.

3. UPI One World for Foreign Tourists

UPI One World is a special facility introduced for international visitors travelling to India.

Features of UPI One World

Allows foreign tourists to make digital payments in India.
Does not require an Indian bank account.
Provides access to UPI-based merchant payments.
Available after completion of customer verification.

Requirements

Foreign visitors need:

Valid passport
Valid visa details
Completion of KYC process

Uses

Tourists can use UPI One World for:

Shopping payments
Restaurant bills
Hotel payments
Travel-related expenses
Other merchant transactions

4. Future Vision of UPI Internationalisation

India aims to expand UPI partnerships with more countries and create a connected global digital payment network.

Future Objectives

Increase acceptance of UPI in more countries.
Improve cross-border payment systems.
Provide low-cost international transactions.
Promote India’s digital payment model worldwide.
Support global financial inclusion.

Features of UPI

First Feature : UPI 123PAY – Digital Payments for Feature Phone Users

Introduction

UPI 123PAY is an instant payment facility launched by the National Payments Corporation of India (NPCI) that enables feature phone users to make digital payments through the Unified Payments Interface (UPI) system.

It was introduced to promote financial inclusion by allowing people without smartphones or internet connectivity to access secure and real-time digital payment services.

UPI 123PAY allows users to perform various banking and payment transactions through four different technology-based methods:

IVR (Interactive Voice Response) Based Payments
Missed Call Based Payments
UPI App Functionality on Feature Phones
Proximity Sound-Based Payments

1. Payment Through IVR (Interactive Voice Response)

Meaning

The IVR-based facility allows users to make UPI transactions by making a secure call to a predefined IVR number. This method does not require an internet connection or smartphone.

Features

Users can complete UPI onboarding through a phone call.
Available in multiple regional languages.
Supports multiple banks and service providers.
Enables secure digital payments through voice instructions.
Useful for users living in areas with limited internet connectivity.

Process of IVR-Based UPI Payment

Step 1: User Registration

User calls the designated UPI 123PAY IVR number.
The system starts the registration process.

Step 2: Language Selection

User selects the preferred language for communication.

Step 3: Bank Selection

User provides the name of the bank where the account is maintained.

Step 4: Account Linking

User selects the bank account linked with the registered mobile number.

Step 5: Debit Card Verification

User enters:

Last 6 digits of debit card number.
Debit card expiry month and year.

Step 6: Authentication

User enters debit card PIN.
Bank OTP verification is completed.

Step 7: Setting UPI Credentials

User creates a UPI PIN.
User can start making UPI transactions without internet access.

2. Payment Through Missed Call Based Approach

Meaning

The missed call-based method allows feature phone users to make payments by giving a missed call to a designated number.

This facility is useful for users who have limited or no internet connectivity.

Features

Enables basic banking transactions through missed calls.
No smartphone or internet connection is required.
Provides secure authentication through UPI PIN.
Allows users to make payments after completing registration.

Process of Missed Call Payment

Step 1: Purchase Initiation

Customer purchases goods or services from a merchant.
Merchant generates a payment request linked with the customer’s mobile number and bill amount.

Step 2: Give Missed Call

Customer gives a missed call to the designated UPI 123PAY number.

Step 3: Receive Call

Customer receives an incoming call on the registered mobile number.

Step 4: Authentication

User confirms the transaction.
User enters UPI PIN for authentication.

Step 5: Payment Completion

Transaction is completed securely.
User receives confirmation message.

3. UPI App Functionality on Feature Phones

Meaning

Selected feature phones come with a pre-installed UPI application powered by UPI 123PAY. It provides smartphone-like payment facilities without requiring a smartphone.

Features

Users can:

Send and receive money.
Scan UPI QR codes.
Pay utility bills.
Check account balance.
Perform other UPI transactions.

Advantages

Simple menu-based navigation.
Easy to use for first-time digital payment users.
Provides secure and real-time payment services.
Expands digital payment access to rural and remote areas.

Onboarding Process

Step 1:

Open the UPI application available on the feature phone.

Step 2:

The application registers the user.

Step 3:

Select the bank account.

Step 4:

Choose the linked bank account.

Step 5:

Set UPI PIN.

Step 6:

The user is ready to make UPI payments.

4. Payment Through Proximity Sound-Based Technology

Meaning

The proximity sound-based payment system enables users to make contactless UPI payments using sound technology.

It allows communication between the user’s phone and the merchant’s sound device (Sound Box).

Features

Enables contactless payments.
Does not require scanning QR codes.
Useful for merchants and customers without advanced smartphones.
Provides instant payment confirmation.

Process Flow of Sound-Based Payment

Step 1: Dial IVR Number

User calls the UPI 123PAY IVR number.

Step 2: User Profile Creation

For first-time users, a payment profile is created.

Step 3: Bank Selection

User provides bank details for account linking.

Step 4: UPI ID Creation

A UPI ID is assigned to the user in the format:

mobile.voice@psp

Step 5: Setting UPI PIN

If the UPI PIN is not created:

User enters debit card details.
OTP verification is completed.
UPI PIN is created.

Step 6: Create UPI Number

User creates a UPI number for sending and receiving payments.

Step 7: Merchant Payment

User selects “Pay to Merchant”.
User taps the phone near the merchant’s Sound Box.
Unique sound signal is received.
User enters payment amount.
User enters UPI PIN.
Payment is completed.

Step 8: Confirmation

Sound Box confirms the successful transaction.
User receives confirmation through IVR call.

Importance of UPI 123PAY

Promotes digital financial inclusion.
Provides UPI access to feature phone users.
Helps rural and low-connectivity regions adopt digital payments.
Reduces dependence on cash transactions.
Enables secure banking services without smartphones.

Second Features : eRUPI for Healthcare Benefit Distribution

Introduction

eRUPI is a purpose-specific digital payment solution developed to enable secure and targeted delivery of healthcare benefits. It works as a digital voucher system that allows government agencies and healthcare organizations to provide medical assistance directly to beneficiaries without requiring cash transfers or physical documents.

eRUPI ensures that the provided benefits are used only for the specific healthcare services for which they are issued.

1. Use of eRUPI by Government and Healthcare Organizations

Government departments and healthcare organizations use eRUPI to distribute medical benefits in a transparent and efficient manner.

Key Uses

Distribution of healthcare assistance to eligible beneficiaries.
Delivery of targeted medical benefits without direct bank transfers.
Reduction in paperwork and physical documentation.
Ensures benefits reach the intended recipients.
Enables payments only at authorized healthcare providers.

2. Purpose-Specific Digital Voucher System

eRUPI works as a prepaid digital voucher that is linked to a specific purpose.

Features

Vouchers can only be used for the designated healthcare service.
Prevents misuse or diversion of funds.
Ensures effective utilization of government healthcare schemes.
Improves transparency in benefit distribution.

3. Benefits for Beneficiaries

eRUPI makes healthcare access easier for beneficiaries, especially those with limited banking facilities.

Key Benefits

No requirement of a bank account.
No need for digital payment knowledge.
No requirement for cash payments.
Provides easy access to healthcare services.
Reduces dependency on physical documents.

4. QR Code and SMS-Based Delivery

eRUPI vouchers can be delivered digitally through QR codes or SMS.

Advantages

Easy distribution among different sections of society.
Useful for people with limited digital literacy.
Allows quick redemption at authorized healthcare centres.
Eliminates lengthy verification procedures.

5. Benefits for Healthcare Providers

Healthcare service providers also benefit from eRUPI implementation.

Key Benefits

Guaranteed payment after successful voucher redemption.
Faster settlement process.
Simplified verification system.
Reduced administrative workload.
Better cash flow management.

6. Importance of eRUPI in Healthcare

eRUPI helps in:

Improving transparency in healthcare benefit distribution.
Ensuring proper utilization of government funds.
Providing secure and efficient medical assistance.
Supporting financial inclusion by enabling access without bank accounts.
Creating a digital and paperless healthcare payment ecosystem.

Third features : Hello! UPI – Voice-Based UPI Payment System

Introduction

Hello! UPI is a voice-enabled payment feature introduced to make UPI transactions simpler, more accessible, and user-friendly. It allows users to interact with UPI services through voice commands in Indian regional languages instead of relying only on smartphone touch-based navigation.

Traditionally, users need to open a UPI application and navigate through different options using a smartphone screen. Hello! UPI improves this experience by allowing users to complete payment-related activities through voice conversations.

Hello! UPI was launched by Hon’ble RBI Governor Mr. Shaktikanta Das on 6th September 2023 at the Global Fintech Fest (GFF) 2023.

1. How Hello! UPI Works

Hello! UPI enables users to make UPI payments by using their voice.

Working Process

Users can communicate with UPI applications through voice commands.
The system understands instructions in regional Indian languages.
Users can navigate UPI features without manually searching different options.
Payments can also be initiated through telecom calls using voice interaction.
Existing UPI security features, including UPI PIN authentication, continue to apply.

2. Platforms Where Hello! UPI is Available

Hello! UPI can be enabled on multiple platforms:

1. UPI Applications

Provides voice-based navigation within UPI apps.
Helps users access different payment options easily.
Existing UPI features remain available.
UPI PIN entry continues through the Common Library (CL).

2. Telecom Calls

Enables users to make payments through voice conversations during telecom calls.
Works through NPCI’s Server Side Common Library (SSCL).
The existing framework used for UPI 123PAY is also supported through SSCL.
Existing security guidelines and controls continue to apply.

3. IoT Devices

Enables voice-based payment interaction through connected smart devices.
Expands UPI accessibility beyond smartphones.

3. Benefits of Hello! UPI

1. Regional Language Support

Enables users to make payments using Indian regional languages.
Helps people who are more comfortable communicating in their mother tongue.
Reduces language barriers in digital payments.

2. Wider Payment Accessibility

Expands digital payment access to a larger section of the population.
Helps users who may find traditional app-based payments difficult.
Supports financial inclusion.

3. Easy Digital Payment Experience

Simplifies navigation within UPI applications.
Reduces dependence on screen-based interaction.
Provides a more natural conversation-based payment experience.

4. Support for Special User Groups

Hello! UPI is especially beneficial for:

Senior citizens who may face difficulty using smartphone applications.
Digitally less-literate users.
Visually impaired users.
Users who prefer voice-based interaction.

4. Key Features of Hello! UPI

Voice-Based Payment Assistance

Allows users to interact with UPI through voice commands.
Provides easier access to payment services.

Multi-Language Support

Supports Indian regional languages.
Makes digital payments more inclusive.

Multi-Device Availability

Works across:
- Smartphones
- Feature phones
- IoT devices

Integration with Existing UPI System

Works along with existing UPI functionalities.
Maintains existing security standards.
UPI PIN authentication remains protected through Common Library (CL).

5. Hello! UPI Through NPCI Infrastructure

Server Side Common Library (SSCL)

Hello! UPI on telecom calls is enabled through NPCI’s Server Side Common Library (SSCL).
UPI 123PAY also uses the SSCL framework.
The same security guidelines and operational controls apply to Hello! UPI.

6. Hello! UPI in UPI Applications

Hello! UPI acts as an additional voice-based feature inside existing UPI apps.
It simplifies user interaction and navigation.
Existing UPI services continue to function normally.
Users still complete secure transactions through the existing UPI authentication process.

Importance of Hello! UPI

Hello! UPI strengthens India’s digital payment ecosystem by making UPI more inclusive, language-friendly, and accessible. It helps bridge the digital gap by allowing people to use voice-based payments without depending entirely on complex app interfaces.

Fourth Features : UPI Cash Point

What is UPI Cash Point?

UPI Cash Point is a feature of the UPI ecosystem that allows customers to withdraw cash from authorised local shops, merchants, and Business Correspondent (BC) outlets using their UPI application.

It enables people to access cash withdrawal services at nearby stores such as grocery shops, pharmacies, and other authorised merchant locations, reducing dependence on traditional ATMs.

Through UPI Cash Point, customers can withdraw cash by simply scanning a UPI QR code and completing the transaction through their UPI app.

Purpose of UPI Cash Point

UPI Cash Point was introduced to solve difficulties faced by customers while withdrawing cash, especially in areas where banking infrastructure is limited.

It addresses problems such as:

Lack of ATMs in rural areas and small towns.
ATMs being out of cash or temporarily unavailable.
Difficulty in finding nearby ATMs in unfamiliar locations.
Limited access to banking services in remote areas.

UPI Cash Point brings cash withdrawal services closer to customers through existing local merchants.

How UPI Cash Point Works?

UPI Cash Point converts authorised merchants and Business Correspondent outlets into cash withdrawal points.

The process involves:

Step 1: Visit an Authorised Cash Point

The customer visits a nearby authorised BC outlet or merchant shop providing UPI Cash Point services.
The customer requests a cash withdrawal.

Step 2: Scan UPI QR Code

The Business Correspondent displays a UPI QR code.
The customer scans the QR code using any UPI-enabled mobile application.

Step 3: Authorise Transaction

The customer enters the required withdrawal amount.
After verifying transaction details, the customer authorises the payment through the UPI app.
The transaction is completed after successful authentication.

Step 4: Receive Cash

Once the transaction is successfully received by the BC outlet, the merchant hands over the equivalent cash amount to the customer.

Transaction Limit

The maximum limit for a UPI Cash Point transaction is ₹5,000 per transaction.
Other limits may apply according to regulatory guidelines issued by the Reserve Bank of India (RBI) and NPCI from time to time.

Benefits of UPI Cash Point

For Customers

Easy access to cash withdrawal services near their location.
Reduces dependency on ATMs.
Useful in rural and semi-urban areas.
Provides banking services through local merchants.
Simple and secure withdrawal process using UPI.

For Merchants / Business Correspondents

Provides additional income opportunities.
Expands financial services at local shops.
Helps merchants become part of the digital banking ecosystem.

For Financial Inclusion

Improves access to basic banking services.
Helps people in areas with limited banking infrastructure.
Supports the goal of increasing digital and financial inclusion.

Importance of UPI Cash Point

UPI Cash Point strengthens the digital payment ecosystem by combining digital transactions with physical cash access.

It helps create a wider banking network by using local merchants as service points, making cash withdrawal facilities available even in areas where ATMs and bank branches are limited.

Fifth features : UPI Circle

What is UPI Circle?

UPI Circle is a feature of the UPI ecosystem that allows a primary UPI user (payer) to give payment authority to another person (secondary user) to make UPI transactions from the primary user’s bank account within a predefined limit.

It enables delegated payments where the secondary user can make payments without the primary user performing every transaction manually.

UPI Circle provides convenience while maintaining security through transaction limits, authentication, and risk controls.

Concept of UPI Circle

In traditional UPI payments, a person needs their own bank account linked with UPI to make transactions.

However, many people still depend on family members or others for digital payments because:

They do not have a bank account linked with UPI.
They are not comfortable using digital payments.
They depend on another person for managing household expenses.

UPI Circle solves this problem by allowing a trusted person to make payments on behalf of the primary user with controlled access.

Users in UPI Circle

1. Primary User

A Primary User is the UPI account holder who provides payment permission to another person.

Role of Primary User:

Delegates UPI payment authority to a secondary user.
Sets transaction limits for the secondary user.
Maintains control over the account.
Provides authentication approval for delegated payments.

2. Secondary User

A Secondary User is the person who receives permission from the primary user to make UPI payments.

Features of Secondary User:

Can perform UPI transactions using the authority given by the primary user.
Can make payments within the permitted limit.
May or may not have their own bank account linked with UPI.
Uses UPI services with the approval of the primary user.

Need for UPI Circle

Although UPI has created a simple digital payment system, some challenges still exist:

1. Dependence on Cash Payments

Many people still use cash for daily expenses.
Family members often manage payments for others.

2. Requirement of Bank Account

To use regular UPI services, users generally need a bank account linked with UPI.
Many individuals are unable to use UPI due to lack of banking access.

3. Digital Payment Hesitation

Some users, especially elderly people, are uncomfortable with online payments.
They require assistance from trusted family members.

UPI Circle provides a solution by allowing controlled digital payment access without transferring money or sharing banking credentials.

How UPI Circle Works?

The primary user selects a trusted person as a secondary user.
The primary user provides permission to use their UPI account.
A transaction limit is decided.
The secondary user can make payments within the authorised limit.
The primary user continues to maintain control and monitoring over transactions.

Benefits of UPI Circle

For Primary Users

Allows delegation of payments without sharing UPI PIN or bank details.
Provides control over spending limits.
Helps monitor transactions made by secondary users.
Reduces the need to make every payment personally.

For Secondary Users

Enables digital payments without managing their own bank account.
Provides easy access to UPI services.
Reduces dependency on cash.
Makes everyday payments simpler.

UPI Circle Use Cases

1. Parents Supporting Children

Example:

A parent can allow their college-going child to make payments for:

Stationery
Food expenses
Travel
Daily requirements

The parent can:

Set spending limits.
Monitor expenses.
Avoid giving physical cash.

2. Senior Citizens

Example:

Senior citizens who are uncomfortable with digital payments can use UPI Circle.

Benefits:

Children can provide payment authority.
Elderly users can shop without carrying cash.
Reduces difficulty in handling online transactions.

3. Household Expenses

Example:

A working person can allow a spouse or domestic helper to make household purchases.

Benefits:

Easy management of daily expenses.
Controlled spending limits.
Reduced need for cash handling.

4. Business Use

Example:

A business owner can provide payment access to employees for work-related expenses.

Benefits:

Employees can make authorised payments.
Reduces handling of petty cash.
Improves tracking and control of expenses.

UPI Payment through IoT (Internet of Things)

What is UPI Payment through IoT?

UPI Payment through IoT enables users to make UPI transactions using smart devices and software applications other than smartphones.

This feature allows trusted devices to perform payments after receiving user authorisation.

Examples of IoT-Based UPI Payments

1. Smart Glasses

Users can make retail payments through connected smart glasses.

2. Smart TV

Users can pay for streaming services directly through smart televisions.

3. Connected Vehicles

Payments can be made for:
- Fuel stations
- EV charging
- Vehicle-related services

4. AI Chatbots

Users can purchase goods and services through AI-powered systems.

Current Status of IoT Payments

AI and software-based IoT payments are currently being tested through pilot projects.
They are available for limited users under a Closed User Group (CUG).

Transaction Limits for UPI IoT Payments

Maximum transaction limit per device: ₹5,000
Monthly transaction limit per device: ₹15,000
First 24-hour limit after linking a new device: ₹2,000
Maximum number of linked secondary devices/software: 5 devices

Process Flow of UPI IoT Payment

Step 1: Device Registration

User opens the IoT application.
Selects the option “Enable UPI for your device”.
Enters the registered mobile number.

Step 2: Verification

User receives OTP on the mobile number.
OTP verification is completed.

Step 3: Device Linking

A QR code is displayed on the IoT device.
User scans the QR code through the primary UPI application.
Device/software details appear in the UPI app.

Step 4: Authorisation

User provides consent.
Sets transaction limits.
Authenticates through:
- UPI PIN, or
- Biometric authentication.

Step 5: Payment

The user can now make payments using linked IoT devices or software.

Importance of UPI Circle and IoT Payments

UPI Circle and UPI IoT payments expand the UPI ecosystem by:

Increasing digital payment accessibility.
Supporting people who depend on others for payments.
Reducing cash dependency.
Improving financial inclusion.
Enabling secure payments through future technologies.

Sixth Features : UPI LITE – Feature Overview

Heading	Details
What is UPI LITE?	UPI LITE is a payment solution designed to process low-value UPI transactions (below ₹1000) in a faster and PIN-less manner. It works on the existing UPI ecosystem protocols to ensure commonality, compliance, and system acceptance while providing adequate risk management.
Purpose of UPI LITE	UPI LITE aims to provide a customer-friendly payment experience by reducing dependency on real-time processing of every small transaction through core banking systems. It also reduces the load on the banking infrastructure.
Transaction Type	Designed mainly for small-value everyday transactions such as retail payments, small purchases, and quick payments.
Technology Base	Runs on existing UPI infrastructure and provides a secure on-device wallet experience within the UPI application.

Benefits of UPI LITE

Benefit	Explanation
Improved Success Rate for UPI Transactions	Since small transactions are processed through the UPI LITE wallet, payment failures are reduced and transaction success rates improve.
Less Infrastructure Load on Remitter Bank CBS	UPI LITE reduces the number of real-time requests sent to the remitter bank’s Core Banking System (CBS), improving system efficiency.
Uncluttered Passbook for Users	Small-value UPI LITE transactions do not create multiple entries in the bank passbook, making account statements cleaner.

UPI LITE Activation Process

Step	Process
Step 1	Customer enables UPI LITE from any UPI application that supports the UPI LITE feature.
Step 2	Customer provides consent for activating the UPI LITE (On-Device Wallet).
Step 3	Customer must have a bank account linked with UPI and an active UPI PIN.
Step 4	Customer authorises the issuing bank through UPI PIN to enable UPI LITE.
Step 5	The bank transfers funds from the customer’s bank account to the UPI LITE wallet.
Step 6	After successful confirmation by the issuing bank, the UPI LITE wallet is activated.
Step 7	The virtual balance becomes visible in the Common Library (CL) of the UPI application.

UPI LITE X (Offline Payment Solution)

Heading	Details
What is UPI LITE X?	UPI LITE X is an advanced version of UPI LITE that enables fully offline UPI payments without requiring internet connectivity for either the sender or receiver.
Purpose	It enables quick and reliable digital payments in areas with poor or no network connectivity.
Examples of Use Areas	Underground stations, remote locations, trekking points, flights, parking areas, and low-network zones.
Technology Used	Uses direct device-to-device communication through NFC (Near Field Communication) technology.
Payment Method	Users can make payments by bringing their device close to the receiver’s device.
Transaction Settlement	After successful payment, the amount is deducted from the sender’s UPI LITE wallet and transferred to the receiver’s UPI LITE wallet in real time.

Benefits of UPI LITE X

Benefit	Explanation
Offline Transactions	Enables payments without internet connectivity.
Enhanced Accessibility	Allows users to make payments in low or poor-network areas such as flights, parking locations, and remote places.
Improved Success Rates	Provides smoother payment experiences with higher transaction success rates.

Features of UPI LITE X

Feature	Details
Offline Capability	Both payer and payee must have UPI LITE X and offline payment capability enabled.
Wallet Usage	Uses the existing UPI LITE wallet for offline transactions.
Transaction Limit	Maximum limit of ₹500 for offline UPI LITE X transactions.
Internet Requirement	Transactions can occur with or without internet connectivity.
Device Support	Currently supported on Android mobile devices.
Communication Technology	Uses NFC for device-to-device communication.
Risk Management	Governed by configurable risk rules. Currently, one debit and ten credit transactions are allowed while offline.

UPI LITE X Transaction Flow

Step	Process
1	User opens the UPI application.
2	User selects the Tap & Pay option within the application.
3	User enters the transaction amount.
4	User taps their mobile device on the receiver’s device.
5	Payment is successfully completed without requiring a UPI PIN.

UPI Tap & Pay Feature

Heading	Details
What is UPI Tap & Pay?	UPI Tap & Pay is a payment method similar to Scan & Pay, but instead of scanning a QR code through the camera, it uses NFC technology to capture the Payee UPI ID.
Purpose	Provides a faster, simpler, and instant UPI payment experience.
Technology Used	NFC-enabled mobile devices and UPI Smart Tags / UPI Smart QR.
Device Requirement	Only smartphones and devices having NFC capability can use UPI Tap & Pay.
Availability	UPI LITE Tap & Pay is available on both Android and iOS devices.

UPI Tap & Pay Product Structure

Feature	Explanation
Convenience	Provides a next-generation UPI payment experience through simple tapping.
Tap & Pay Access	Users need to select the Tap & Pay button available in their UPI application.
Payment Method	Transaction happens by tapping the mobile device on a UPI Smart Tag or UPI Smart QR.
Transactions up to ₹1000	If UPI LITE is enabled, payments are processed through UPI LITE; otherwise, payment is completed through bank account UPI PIN authentication.
Transactions above ₹1000	User authentication through UPI PIN is required for security.

UPI Tap & Pay Transaction Flow

Step	Process
1	User opens the UPI application.
2	User clicks on the Tap & Pay icon.
3	User enters the transaction amount.
4	User taps the mobile device on the receiver’s UPI Smart NFC QR / Smart Tag.
5	For amounts up to ₹1000, payment is processed through UPI LITE if enabled.
6	If UPI LITE is not enabled, the user completes the transaction by entering the UPI PIN.

Overall Importance of UPI LITE Ecosystem

Area	Contribution
Faster Payments	Enables quick low-value transactions without entering UPI PIN every time.
Better Banking Efficiency	Reduces load on bank core banking systems.
Offline Payments	UPI LITE X enables digital payments even without internet connectivity.
Improved User Experience	Makes everyday payments simpler, faster, and more reliable.
Financial Inclusion	Helps users in areas with limited internet and banking infrastructure.

Seventh Features : Multi-Signatory Accounts on UPI

What are Multi-Signatory Accounts?

Heading	Details
Meaning	Multi-Signatory Accounts are bank accounts where multiple users/signatories are linked to a single account and transactions require approval from one or more authorised signatories.
UPI Enablement	By enabling Multi-Signatory Accounts on UPI, any authorised user/signatory can initiate a payment request through any UPI application, while other required signatories can approve or decline the payment request through their respective UPI applications.
Purpose	The feature provides better control, transparency, and security by ensuring that funds cannot be transferred without the required approval of authorised persons.

What Problem Does Multi-Signatory UPI Solve?

Area	Explanation
Traditional Banking Practice	The Indian banking system has supported Multi-Signatory Accounts for many years where multiple persons are required to approve transactions.
Need for Multiple Approvals	These accounts prevent a single individual from having complete control over the funds.
Digital Payment Requirement	Earlier, multi-signatory approval processes were mainly handled through traditional banking channels. UPI enables the same approval mechanism digitally.
Security and Control	It ensures that payments are made only after approval according to the authorisation structure decided by the account holders.

Where Multi-Signatory Accounts are Useful?

Users / Organisations	Use Case
Partnership Firms	Multiple partners can approve business payments.
Trusts and Societies	Ensures proper control over organisational funds.
Clubs and Associations	Payments can be approved by authorised office bearers.
Educational Institutions	Helps maintain financial discipline and approval-based payments.
SMEs and Businesses	Allows multiple stakeholders to control business transactions.
Households	Certain family accounts can use joint approval mechanisms.

Transaction Limits

Heading	Details
Transaction Limit	Transaction limits for Multi-Signatory Accounts follow the guidelines issued by NPCI and the Reserve Bank of India (RBI).
Applicability	Limits may vary depending on account type, regulatory requirements, and applicable UPI guidelines.

Transaction Process Flow of Multi-Signatory Accounts on UPI

Step	Process	Explanation
Step 1: Payment Request Initiation	Payment request is initiated by the initiator from any UPI application.	Any authorised signatory can start the payment process through a UPI-enabled app.
Step 2: Authorization Request Generation	Remitter Bank initiates authorization request(s) to all required signatories based on the authorization matrix set by the account holder.	The bank checks the predefined approval requirements and sends requests to the necessary signatories.
Step 3: Approval or Decline by Signatories	Authorised signatories approve or decline the transaction using their UPI PIN.	Each required signatory verifies the payment request and provides approval through UPI authentication.
Step 4: Account Debit and Fund Transfer	Once all required signatories approve the transaction and validation is completed by the remitter bank, the account is debited and a credit request is sent to the beneficiary bank through UPI.	The payment is processed only after receiving all required approvals.
Step 5: Transaction Confirmation	After completion of the payment journey, UPI sends transaction confirmation to all Payer PSPs of the users/authorised signatories involved in the transaction.	All involved parties receive confirmation regarding the successful completion of the transaction.

Importance of Multi-Signatory Accounts on UPI

Benefit	Explanation
Enhanced Security	Prevents unauthorised transactions by requiring approval from multiple authorised persons.
Better Financial Control	Organisations can maintain approval-based payment systems.
Digital Convenience	Removes the need for physical signatures and manual banking processes.
Transparency	All authorised signatories remain aware of payment activities.
Supports Businesses and Institutions	Makes UPI suitable for accounts requiring collective decision-making.

Eighth Features : UPI Reserve Pay

What is UPI Reserve Pay?

Heading	Details
Meaning	UPI Reserve Pay is a payment feature that allows users to reserve a specific amount of money in their bank account once and use it for multiple payments later.
Concept	It works like keeping money aside for future purchases. The amount is reserved in the user’s account, but the actual payment happens only when the user purchases goods or receives services.
Purpose	It provides a balance between advance payment and cash-on-delivery, giving assurance to merchants while allowing customers to keep control over their funds.

What Problem Does UPI Reserve Pay Solve?

Current Challenge	How UPI Reserve Pay Solves It
Full Advance Payment	Customers often need to pay the complete amount before receiving goods or services.
Cash-on-Delivery Dependency	Customers choosing COD create challenges for merchants regarding payment collection and order confirmation.
Merchant Payment Assurance	Merchants receive confirmation that funds are available and reserved for the transaction.
Customer Fund Control	Customers do not lose money immediately; funds remain in their account until the actual purchase or service is completed.

Key Features of UPI Reserve Pay

Feature	Details
Amount Reservation	Users can block/reserve money in their bank account for future payments.
Payment Timing	Money is deducted only when the user actually purchases goods or receives services.
Merchant Assurance	Merchants get confirmation that sufficient funds are reserved for payment.
User Control	Users can manage, modify, or cancel the reserved amount before expiry.
Tracking Facility	Users can track reserved amounts and payments through the merchant application and UPI application.

Transaction Limits

Parameter	Limit
Maximum Amount that can be Reserved	₹10,000 per block
Maximum Reserve Duration	90 days

Transaction Process Flow of UPI Reserve Pay

1. Setting Up Your Reserve

Step	Process	Explanation
Step 1	Select UPI Reserve Pay	Customer chooses the UPI Reserve Pay option while shopping on a merchant application.
Step 2	Enter Reserve Details	Customer enters the amount to be reserved and selects the duration within the permitted limit.
Step 3	Select UPI Application	Customer chooses the UPI app through which the Reserve Pay setup will be initiated.
Step 4	Authentication	Customer verifies the details and confirms the request using their UPI PIN.
Step 5	Fund Reservation Confirmation	The amount is reserved in the selected bank account and the merchant receives confirmation of fund availability.

2. Making Payments Using Reserved Amount

Step	Process	Explanation
Step 1	Purchase Goods or Services	Customer places an order or receives a service from the merchant.
Step 2	Select UPI Reserve Pay	Customer chooses the reserved amount option for making payment.
Step 3	Merchant Deduction	Merchant deducts the required amount from the reserved balance.
Step 4	Payment Notification	Customer receives notification whenever money is deducted from the reserved amount.
Step 5	Payment Tracking	Customer can view payment details through the merchant app and UPI app.

3. Managing Your Reserve

Action	Explanation
Modify Reserved Amount	Customer can change the reserved amount before the expiry period, as permitted.
Cancel Reserve	Customer can cancel the reservation before expiry.
Expiry of Reserve	If the reserved amount is unused, it is automatically released back to the user’s bank account after expiry.
Unused Funds	Any remaining amount that is not utilised becomes available for normal use by the customer.

Benefits of UPI Reserve Pay

For Customers	For Merchants
No need to make full advance payment.	Assurance that funds are available.
Maintains control over personal funds.	Reduces risk of payment failure.
Safer alternative to cash-on-delivery.	Improves customer confidence and order processing.
Easy tracking and management of payments.	Faster and smoother payment collection process.

Importance of UPI Reserve Pay

UPI Reserve Pay improves the digital payment experience by combining the advantages of prepaid assurance and post-delivery payment flexibility. It helps merchants secure payments while allowing customers to maintain control over their money until the actual transaction takes place.

Conclusion on UPI (Unified Payments Interface)

Unified Payments Interface (UPI) has transformed the digital payment ecosystem of India by providing a fast, secure, real-time, and accessible payment infrastructure. Developed by the National Payments Corporation of India (NPCI), UPI has simplified financial transactions by enabling instant bank-to-bank transfers through mobile applications.

UPI has played a significant role in promoting a cashless economy, financial inclusion, and digital empowerment by making payments accessible to individuals, businesses, and government institutions. Features such as QR code payments, UPI Lite, UPI 123PAY, UPI Circle, UPI Reserve Pay, UPI Tap & Pay, and voice-based payments have further expanded its reach among different sections of society.

The success of UPI is supported by India’s strong digital foundation, including Jan Dhan accounts, Aadhaar-based identity, mobile connectivity, and affordable internet services. It has reduced dependency on cash, improved transaction convenience, and created a transparent digital payment environment.

Today, UPI is not only a major payment platform in India but has also become a global example of a successful real-time payment system. With continuous innovation and international expansion, UPI is expected to play a crucial role in shaping the future of digital finance and financial inclusion worldwide.