Facts for Prelims (FFP)
Source: LM
Context: The Reserve Bank of India (RBI) has introduced several measures to further advance digital payments through the unified payments interface (UPI):
Features are:
- Conversational Payments with AI: The RBI is launching “conversational payments” (audio interaction with AI bots) on UPI, enabling users to interact with an AI-powered system to initiate and complete transactions safely.
- This innovative mode aims to enhance ease of use and expand UPI’s reach.
- Offline Transactions with NFC: The RBI proposes enabling offline transactions using Near Field Communication (NFC) technology.
- This approach supports digital payments in scenarios with weak or no internet connectivity, enhancing speed and accessibility.
- Transaction Limit Increase for Small-Value Payments: The transaction limit for small-value offline digital payments will be increased to ₹500.
- The overall limit of ₹2,000 will remain to mitigate risks. This adjustment facilitates faster, more reliable, and contactless payments for everyday small-value transactions.
- Expansion of UPI-Lite: The UPI-Lite wallet introduced by RBI, aimed at optimizing processing resources for banks, now processes over 10 million transactions a month, enhancing transaction reliability.
- Digital Public Tech Platform: The Reserve Bank Innovation Hub is developing a digital platform for frictionless credit delivery with open architecture and APIs, allowing seamless connectivity for all financial sector players.
About UPI:
A unified payment system (UPI) powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features like Instant transfer of funds, bill-sharing facility, etc. It has been developed by: National Payments Corporation of India.
About UPI-Lite:
UPI-Lite is an on-device wallet service that enables low-value transactions without utilizing a Remitter bank’s core banking systems in real-time.
