New UPI features announced by RBI: Chat with AI NFC support & many other features

During the Monetary Policy Committee (MPC) meeting on Thursday, RBI Governor Shaktikanta Das revealed numerous new features for UPI. Here’s what you should know.

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Many new features and conversational payments would be added to UPI soon according to  RBI Governor Shaktikanta Das.
Many new features and conversational payments would be added to UPI soon according to RBI Governor Shaktikanta Das.


UPI, India most used method for digital payments is getting several big updates with new features. Conversational Payments, a novel way to make payments by conversing with AI-powered platforms, is the most prominent of them.
There’s even, more as RBI Governor Shaktikanta Das announced many new other new features at Monetary Policy Committee (MPC) meeting on Thursday. Here’s a quick rundown.
Conversational Payments with AI
With the purpose of leveraging cutting-edge technology to improve digital payments, NPCI intends to launch ‘Conversational Payments’ on UPI, which will allow users to converse with AI-powered systems to make payments in a safe and secure environment.
According to Das, this capability would work on both smartphones and feature phones, helping to expand digital penetration in the country. It will first be available in Hindi and English, with additional Indian languages to follow. The RBI will issue directions to NPCI soon.
While specifics on how conversational payments would operate have not been disclosed, it is probable that NPCI will advocate for the addition of an AI chatbot like ChatGPT to assist consumers with payments.
More UPI rate limit
In addition, the RBI has proposed raising the per transaction limit for UPI Lite to Rs 500 from Rs 200 in offline mode. For small value digital payments in offline mode, including National Common Mobility Card (NCMC) and UPI Lite, the RBI has set a limit of Rs 200 per transaction and Rs 2,000 per payment instrument.
This channel provides faster, more reliable, and contactless payments for small-value transactions and transit payments because it does not require two-factor verification.
“There have been demands for enhancing these limits. To encourage wider adoption of this mode of payments and bring in more use cases into this mode, it is now proposed to increase the per transaction limit to Rs 500,” Das said.
To mitigate the dangers associated with relaxing two-factor authentication, the overall maximum remains at Rs 2,000. The RBI will provide directions on this as well, he said.
NFC-based offline UPI payments
Das has also announced offline UPI payments using UPI Lite utilising near-field communication (NFC) technology. This will simplify payments because customers will only need to tap their smartphone on the point-of-sale (PoS) gadget.
“It is proposed to facilitate offline transactions using NFC technology to promote the use of UPI-Lite.” This functionality will not only enable retail digital payments in instances where internet or telecom connectivity is poor or non-existent, but it will also ensure speed with little transaction drop,” according to the MPC statement.
Public Reactions
The new NPCI features are viewed as a tool that can accelerate digitalisation in rural and remote locations while also enhancing access to seamless payments.
“A fantastic initiative by NPCI to increase adoption in rural and remote areas.” While the specifics are unknown, the Conversational AI technology appears to be focused on breaking through literacy hurdles by offering a vernacular-language-speaking real-time assistant to assist consumers with UPI payments. Notably, the offline payment option (and hence the rise in limits) acknowledges the lack of access to the internet and infrastructure in remote areas and is a necessity to promote payment digitisation. As limitations are raised, it will become even more important to verify the security and legitimacy of such transactions in order to avoid misuse,” said Shreya Suri, Partner at INDUSLAW.
They are also expected to democratise financial services and payments in the country.
“The RBI’s announcement of new UPI features such as conversational-based payments is a significant step towards improving digital payment accessibility in India.” The advent of NFC-based payments will provide UPI users with the ability to tap and pay, which is an exciting development. This could help to further democratise financial services and payments in the country, which is quite encouraging,” said Sanjay Khan Nagra, Partner at Khaitan & Co.

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