Paytm, one of India’s leading financial services platforms, recently received approval from the National Payments Corporation of India (NPCI) to onboard new users for its Unified Payments Interface (UPI) services. This marks a significant relief for Paytm, following a regulatory setback earlier this year when its banking arm faced a ban due to compliance issues. Paytm had submitted a request to NPCI in August, and the green light has now been given, paving the way for the company to resume expanding its digital payments business.
The suspension of Paytm’s banking unit, enforced by the Reserve Bank of India (RBI) in January, had sparked concerns about the company’s future in the fintech space. It also led to a notable dip in Paytm’s stock value. With the recent approval, Paytm aims to regain momentum in the highly competitive UPI market, where it competes with players like Google Pay and PhonePe.
In other developments, the RBI has announced an increase in transaction limits for UPI Lite and UPI 123PAY services. For UPI Lite, the transaction cap has been raised from ₹500 to ₹1,000, and the wallet limit has gone up from ₹2,000 to ₹5,000. UPI 123PAY, which enables digital transactions for feature phone users, has also seen its transaction limit double from ₹5,000 to ₹10,000.
These enhancements, part of the RBI’s broader initiative to promote digital transactions, are expected to further boost the use of UPI across various segments of the population. RBI Governor Shaktikanta Das highlighted that these adjustments will make UPI more accessible and user-friendly, encouraging greater adoption across urban and rural areas.
UPI Lite is a streamlined version of the payment system designed for small transactions, allowing users to make payments without the need to enter a UPI PIN. The wallet limit has been increased to ₹5,000, making it easier for users to manage small, everyday transactions without hassle.
Launched in March 2022, UPI 123PAY is specifically designed for users of feature phones, offering them the convenience of digital payments without the need for smartphones or internet access. With the recent update, users can now make payments of up to ₹10,000 per transaction. UPI 123PAY supports a variety of payment methods, including interactive voice response (IVR) systems, missed calls, and voice-enabled transactions, making it a versatile tool for those in rural and underbanked regions.
These developments underscore the growing importance of UPI in India’s digital economy, making digital payments more inclusive and accessible for all segments of society. As Paytm resumes onboarding new users, and with increased UPI transaction limits, the future of digital payments in India looks even more promising.
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