RBI introduces delegated payments through UPI

Aug 8, 2024

Synopsis
UPI Payments: The Reserve Bank of India rolled out a feature in August allowing delegated UPI payments. Primary users can approve transactions for secondary users, like minors, within set limits. The RBI also increased the tax payment threshold via UPI to Rs. 5 lakh, enhancing convenience and transaction speed.

The Reserve Bank of India introduced delegated payments through UPI during its August monetary policy. This would enable an individual (primary user) to allow another individual (secondary user) to make UPI transactions from the primary user’s bank account. The limit for such a transaction would be set by the primary user.

“They are trying to make the primary account holder (a parent) as the approving authority, so that UPI can be used by minors too. The parents will just just have to approve a transaction, via the family account. With this, a whole new system comes inside the UPI application”, said Mohit Bedi Co-Founder & CBO at Kiwi, a third party payments application.

This is similar to how minors can be added to their parents' accounts as authorised users and be issued a card. In this case, a minor or an individual without a bank account will be added to a ‘family account’ on the UPI app, Bedi said.

These transactions can happen only via a savings account, and not via credit or credit line on UPI, other industry leaders said.

The RBI also increased the threshold of tax payments via the unified payments interface (UPI) to Rs. 5 lakh per transaction on Thursday.

Prior to this, the transaction limit was Rs. 1 lakh per transaction for tax payments. This is expected to increase ease of payments, as paying through NEFT requires the user to put in account numbers, while also increasing the speed of the transaction.

[The Economic Times]