In the fast-paced realm of digital payments, the Unified Payments Interface (UPI) has solidified its position as a mainstream method of financial transactions in India. As we usher in 2024, significant changes have been introduced, aiming to enhance the digital transaction landscape. In this blog post, we’ll delve into the six major updates in UPI payments that came into effect from January 1st, 2024.
Deactivation of Inactive UPIs:
For users of various UPI-enabled apps like Google Pay, PhonePe, and Paytm, a noteworthy change is the deactivation of inactive UPI IDs. The National Payments Corporation of India (NPCI) has mandated the deactivation of UPIs that have been dormant for more than a year. This proactive measure aims to prevent potential misuse or dormant accounts, safeguarding users from financial attacks.
RBI’s 4-Hour Time Limit for New Users:
The Reserve Bank of India (RBI) has introduced a 4-hour time limit for the first payments to newly added recipients exceeding INR 2,000/-. This time window provides senders with the flexibility to reverse or modify payments made in error. While enhancing control and security, it also means a delay in the realization of funds for the recipient, introducing a subjective dynamic to the payment process.
Increased Transaction Limits:
NPCI has raised the maximum daily limit on UPI transactions to INR 1,00,000/- for standard and retail transactions. Notably, transactions in healthcare facilities and educational institutions have seen a substantial increase from INR 1,00,000/- to INR 5,00,000/-, aligning with RBI’s mandate on December 8th.
Introduction of ATM UPI:
A groundbreaking development is the introduction of UPI for ATM withdrawals. Users can now leverage UPI to withdraw cash from ATMs by entering the amount, scanning the QR code, and initiating the withdrawal. Hitachi Payment Services has already implemented ATM UPI via White Label ATM (WLA), making this feature accessible, especially in metropolitan areas.
Interchange Fee for Merchant Payments:
A notable change in UPI payment rules is the imposition of an interchange fee of 1.1 percent for payments exceeding INR 2,000/- made to merchants through online wallets. It’s essential to note that this fee will be applicable to specific merchants and won’t incur additional charges for customers.
Recipient’s Name Display:
In a move towards transparency, UPI transactions will now display the recipient’s actual account holder’s name. This update ensures that senders can identify the legitimate account holder during transactions, eliminating the possibility of misleading or inaccurate information.
Conclusion:
As we navigate the evolving landscape of UPI payments in 2024, these updates reflect a commitment to bolstering security, transparency, and efficiency in digital transactions. Users are encouraged to stay informed and adapt to these changes for a seamless and secure payment experience.
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