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The Reserve Bank of India (RBI) has introduced a major update for feature phone users who rely on UPI 123Pay for digital payments. Starting January 1, 2025, the payment limit for UPI 123Pay transactions will increase from ₹5,000 to ₹10,000. This move aims to make digital payments more accessible for India's 400 million feature phone users.

Key Highlights of the Update

1. Increased Payment Limit

   • The maximum transaction amount via UPI 123Pay has been doubled to ₹10,000.
   • This is a significant enhancement for users making payments without access to smartphones or the internet.

2. Effective Date

   • The new limit will apply starting January 1, 2025.

3. Expanded Reach in Rural Areas

   • With this change, the RBI aims to promote financial inclusion in small towns and villages where feature phones are still widely used.

What is UPI 123Pay?

UPI 123Pay is a Unified Payments Interface (UPI) platform designed for feature phones, enabling digital transactions without requiring internet connectivity.

Features of UPI 123Pay:

• IVR Calls: Users can initiate payments by calling an interactive voice response (IVR) number.
• Missed Call Payments: Payments can be triggered by giving a missed call to a specific number.
• App-Based Payments: Apps for feature phones support UPI transactions.
• Sound-Based Payments: Users can complete transactions using sound wave technology.

Security Enhancements

• Aadhaar-Based Authentication: A new security layer using Aadhaar-based One-Time Token (OTT) authentication has been introduced.
• Improved User Experience: UPI Numeric ID Mapper makes payment integration more user-friendly and seamless.

Difference Between UPI 123Pay and UPI Lite

1. UPI 123Pay:

   • Designed for feature phones.
   • Does not require internet connectivity.
   • New payment limit: ₹10,000 per transaction.

2. UPI Lite:

   • Designed for smartphones with a wallet-based system.
   • Allows transactions up to ₹500 without a UPI PIN.
   • Maximum daily transaction limit: ₹2,000.

Impact of the Update

• Convenience for Feature Phone Users: The increased limit will support higher-value transactions for those without access to smartphones.
• Boost to Digital Payments: Enhanced limits and robust security measures will drive UPI adoption in semi-urban and rural areas.

This initiative is another step toward making digital payments universal, fostering inclusion, and supporting India’s vision of a cashless economy.