As per an Economic Times report, in October 2023, the number of Unified Payments Interface (UPI) transactions in India were in excess of 11 Billion. The total transaction volume reached a whopping ₹ 17.16 Lakh Crores. This just goes on to show how Indians have embraced UPI as the digital payment mode of choice.
In a significant stride towards enhancing digital payments, the National Payments Corporation of India (NPCI) had introduced the next evolution in UPI. The original UPI 2.0 launch date was August 16, 2018, and it continues to be enhanced regularly. Here are the top UPI 2.0 features and benefits that come along with it.
Key Features of UPI 2.0
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Features
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Particulars
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Overdraft (OD) Facility
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Users can link their overdraft accounts to UPI.
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Facilitates instant transactions with all associated OD account benefits.
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Expands UPI's accessibility as an additional digital channel for OD accounts.
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One Time Mandate
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Allows pre-authorization of transactions with a one-time block functionality.
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Ideal for scenarios where money transfer commitment is made in advance.
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Seamless execution for both merchants and individual users.
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Invoice in the Inbox
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Enables customers to review invoices from merchants before making payments.
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Enhances security by verifying the credentials and source of the invoice.
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Streamlines the payment process post-verification.
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Signed Intent & QR
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Heightens security by verifying the authenticity of merchants via QR codes.
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Provides user notifications to ensure the merchant is a verified UPI merchant.
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Accelerates transactions as an app passcode is unnecessary for signed intent.
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Other New and Upcoming Features
Apart from the aforementioned, NCPI is constantly monitoring, evaluating, and enhancing the UPI framework. As a result, it has launched and announced some new features as well.
1. UPI-ATM
- Seamless functioning with the UPI interface to withdraw money.
- Transaction is secured by a one-time QR code instead of an OTP or PIN.
- No need for a physical debit card.
- Interoperable, allowing you to withdraw cash from multiple accounts using a UPI app.
2. UPI Lite X and NFC Based Offline UPI payments
- Enable offline transactions with UPI Lite and near-field communication (NFC) technology.
- UPI Lite allows small transactions with a limit of ₹ 500 per transaction (increased from ₹ 200). UPI Lite X daily limit is yet to be announced, but the key difference between the two systems is that unlike UPI lite, UPI Lite X will not require any internet connectivity and can function in an entirely offline mode.
- Simplify payments by allowing users to tap their smartphones (tap & pay) on the point-of-sale (PoS) machine.
- Ensure speedy transactions with minimal declines, especially in areas with weak or no internet or telecom connectivity.
3. Hello UPI: Pay Using Conversational AI
- Engage in secure conversations with AI-powered systems for making payments using Hello UPI.
- Compatible with both smartphones and feature phones, promoting broader digital adoption.
- Initial support for Hindi and English, with plans to expand to more Indian languages in subsequent phases.
- Using the same voice-assistant platform, Bharat BillPay Connect will allow you to pay bills seamlessly using virtual voice assistants such as Alexa, Siri, and Google.
4. UPI Credit Line
- Similar to Buy Now Pay Later (BNPL) products.
- Makes credit accessible to a diverse population with varying pre-approved borrowing limits.
- Using this line of credit, you can make payments or pay balances even if you do not have the requisite balance in your account at the moment. You will then settle the amount with the issuing bank.
In Summation
As UPI 2.0 unfolds, it brings not just new features but a promise of heightened efficiency, security, and accessibility in digital transactions. The collaborative efforts of NPCI, banks, and key industry players aim to further integrate digital payments into the fabric of India's financial landscape. To enjoy all the benefits of UPI 2.0, you need to have a bank account with one of the NPCI partner banks, like Federal Bank.
Frequently Asked Questions
1. Can you explain the major enhancements and features that UPI 2.0 brings to the National Payments Corporation of India's UPI system?
UPI 2.0 introduces groundbreaking features like overdraft facilities, one-time mandates, invoice verification, and signed intent & QR. These enhancements revolutionise digital transactions, offering users and businesses greater flexibility, security, and convenience.
2. How does UPI 2.0 address security and privacy concerns for users conducting digital transactions?
UPI 2.0 prioritises security by implementing signed intent & QR, ensuring users can verify the authenticity of merchants seamlessly. Additionally, features like one-time mandates enhance privacy, allowing users to pre-authorise transactions securely.
3. Are there any specific benefits for businesses and merchants in UPI 2.0, and if so, what are they?
UPI 2.0 presents significant advantages for businesses and merchants. Invoice in the inbox feature allows customers to verify invoices, instilling trust. Moreover, the signed intent & QR feature adds an extra layer of security, fostering a secure environment for transactions.
4. What changes have been made to the transaction limit and authentication methods under UPI 2.0?
While UPI 2.0 maintains the existing daily UPI limits (₹1 Lakh transaction daily), the introduction of features like overdraft facilities and one-time mandates enhances transaction capabilities. Furthermore, it has been proposed to up the daily limit in the near future. The signed intent & QR feature streamlines transactions, eliminating the need for an app passcode.
5. How can consumers and businesses start using UPI 2.0, and are there any specific steps they need to follow to take advantage of the new features?
To leverage UPI 2.0, consumers and businesses need to ensure their banks are part of the UPI 2.0 member banks. Once confirmed, users can seamlessly integrate the new features into their existing UPI applications, providing an upgraded and efficient digital payment experience.
GUIDES
LAST EDITED BY RUPALI AMIN ON APRIL 25, 2025.
