The Reserve Bank of India (RBI) has unveiled a series of novel features for the Unified Payments Interface (UPI). These newly introduced adjustments hold the promise of reshaping the realm of online payment methods. Notably, this transformative update will additionally enable transactions to be conducted through dialogues with an artificial intelligence (AI) system.

During the presentation of the outcomes of the central bank's bi-monthly policy review, RBI Governor Shaktikanta Das revealed a set of initiatives. The key repo rate was held steady at 6.5 percent. Among the announcements, the RBI introduced three new features for offline UPI payments.

One of these features involves the introduction of 'Conversational Payments' on the UPI platform, utilizing AI-powered systems. This innovation will empower users to instruct an AI-powered system to execute payments on their behalf. While detailed specifics about this function are yet to be disclosed, it is worth noting that this feature will initially be accessible in Hindi and English.

 Moreover, the feature is slated to be accessible on both smartphone and feature phone-based UPI channels, with plans to expand its availability to additional Indian languages in the future. The integration of AI into UPI payments represents a forward-looking step aimed at incorporating evolving technologies into existing frameworks.

Furthermore, the transaction limit for UPI Lite has been raised from Rs 200 to Rs 500. UPI Lite, introduced by the National Payments Corporation of India (NPCI) in September 2022, facilitates swift, small-value transactions by optimizing processing resources for banks, thereby minimizing transaction failures.

This feature initially permitted transactions up to Rs 200 per day without requiring a PIN code, streamlining the transaction process. While the transaction limit has been augmented to Rs 500, the UPI Lite balance ceiling remains unchanged at Rs 2,000, a measure taken to mitigate the risks associated with relaxing two-factor authentication.

Governor Shaktikanta Das also introduced the concept of offline UPI payments utilizing near-field communication (NFC) technology through UPI Lite. This approach streamlines payments, as users merely need to tap their smartphones on the point-of-sale (PoS) machine to effectuate the transaction. Notably, UPI Lite is accessible through platforms like Paytm, BHIM App, GooglePay, and other payment applications.

“To promote the use of UPI-Lite, it is proposed to facilitate offline transactions using NFC technology. This feature will not only enable retail digital payments in situations where internet or telecom connectivity is weak or not available, but it will also ensure speed, with minimal transaction decline,” the MPC statement said.

Image source: Paytm