RBI announces new feature of delegated payment for UPI users

The Unified Payments Interface users will soon be able to authorise other users to make transactions utilizing their bank accounts. On August 8, Reserve Bank of India Governor Shaktikanta Das announced this new delegated payment feature. Through this facility, a primary customer can authorise another individual, a secondary user, to carry out transactions through the former’s bank account to a specified limit.

“This product is expected to add to the reach and usage of digital payments across the country,” the RBI said. UPI has a user base of 424 million.

“Delegated Payments would allow an individual (primary user) to set a UPI transaction limit for another individual (secondary user) on the primary user’s bank account. This product is expected to add to the reach and usage of digital payments across the country. Detailed instructions will be issued shortly,” said the RBI in its monetary policy statement on Thursday.

Sameer Nigam, CEO and founder, PhonePe, said, “In particular, it is a great way to introduce kids and senior citizens to the world of digital payments safely and securely.”

Delegated Payments could simplify the UPI payments experience for those users who may not have a bank account, and could improve access to digital payments in regions where a single bank account is shared among family members.

 “By introducing this feature, it is anticipated that UPI spends will increase by at least 25-30%, as minors and families begin to utilise the expanded functionality and convenience offered by Delegated Payments,” said Mohit Bedi, co-founder and chief business officer (CBO), Kiwi; a fintech startup.

Meanwhile, RBI has increased the limit for tax payments through UPI from Rs 1 lakh to Rs 5 lakh per transaction, responding to the frequency and higher value of direct and indirect tax payments. The increase in the limit of direct and indirect tax payments follows the regulator’s previous decisions to enhance UPI limits in sectors such as capital markets, IPO subscriptions, loan collections, insurance, medical and educational services.