About UPI

• • Unified Payments Interface (UPI) is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood. 
  • This system enables lightning-fast money transfers between bank accounts through a mobile application, effectively bypassing the need for conventional approaches such as net banking or the manual entry of credit card information.
  • UPI is an initiative of the National Payments Corporation of India (NPCI).
  • NPCI launched the pilot programme of UPI in 2016.

• NPCI was incorporated in 2008 as an umbrella organization for operating retail payments and settlement systems in India. 

• It is an initiative of the RBI and Indian Banks’ Association (IBA) under the provisions of the Payment and Settlement Systems Act, 2007, for creating a robust Payment & Settlement Infrastructure in India. 

• It has been incorporated as a “Not for Profit” Company under the Companies Act 2013. 

How is it unique?

• Immediate money transfer through mobile device round the clock 24*7 and 365 days.
• Single mobile application for accessing different bank accounts.
• Single Click 2 Factor Authentication.
• Raising complaints from mobile app directly.
• It also caters to the “Peer to Peer” collect request which can be scheduled and paid as per requirement and convenience.

Why in News?

• The Reserve Bank of India (RBI) has announced a hike in the UPI lite per transaction limit to Rs 1,000 from Rs 500 currently. 
• The central bank has also hiked the UPI lite wallet limit to Rs 5,000 from currently Rs 2,000. 
• The RBI also has hiked the UPI 123PAY per transaction limit to Rs 10,000 from Rs 5,000. 
• The hike in transaction limits will help users make digital payments easier. 

UPI Lite: 

• UPI lite helps individuals to make UPI payments without entering the UPI PIN to do the transactions. 
• UPI lite helps in faster transaction processing, with lesser chance of failed UPI transactions. 

UPI123Pay: 

• UPI123 was launched in 2022, with a view to enable UPI payment facility for feature phone users i.e., who do not have smartphones. 
• This system allows secure transactions without internet access, supporting financial inclusion for those without smartphones.