Unveiling the monetary policy, Reserve Bank Governor Shaktikanta Das said the limit for various categories of unified payments interface (UPI) transactions has now been enhanced to Rs 5 lakh per transaction from the present Rs 1 lakh for payments to hospitals and educational institutions.
He further said that e-mandates for making payments of a recurring nature have become popular among customers. Under the e-mandate framework, an additional factor of authentication is required for recurring transactions exceeding Rs 15,000 currently.
Welcoming the policy announcement, State Bank chairman Dinesh Khara said this will ensure that UPI truly emerges as a public good. On the move towards a unified regulatory framework for connected lending and a regulatory framework for web-aggregation of loan products, he said these steps will ensure better pricing, transparency, and enhanced customer centricity.
Zarin Daruwala of Standard Chartered Bank said, enhanced UPI transaction limits and e-mandate caps will further encourage use of digital payment channels.
Saikrishnan Srinivasan of Experian Credit said the higher UPI payment limits and the increase in e-mandate limit for recurring online transactions will enable consumers to pay more seamlessly.
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Rahul Jain of NTT Data Payment Services India said this strategic measure will stimulate digital transactions, effectively curbing cash usage and fostering the growth of a cashless economy. By extending the payment threshold, the RBI is fostering an environment conducive to seamless financial interactions, ultimately contributing to the transformative journey towards a digitally empowered nation. It will also further boost consumer confidence as far as critical payments are concerned and with UPI on credit cards gaining momentum, it’s important to enhance this limit. On the increased e-mandates for recurring online transactions, he said this will make such transaction more popular and will give a major boost to the cashless system. This also means more benefits to consumers in terms of security, ease of making payments, accessible digital payment.
Yashwant Lodha of Paynearby said increasing UPI payments and e-mandates for specific merchant categories like education, health, financial instruments is a clear enabler for moving some higher ticket transactions also to a straight through digital mode as opposed to today’s multi-step process.
These steps will reduce friction in these categories and also open up new customer segments for digital financial service providers who can now do these transactions at a lower cost and spending less time and effort.
On setting up of a fintech repository, he said fintech yellow pages can be a game changer for emerging fintechs to put themselves out there and increase their discoverability and visibility within the ecosystem and with the regulator. Such a repository will also help in designing policy approaches that will help a larger cross section of the ecosystem and impact more customers positively.
Joginder Rana of Cashe said creating a fintech repository marks a significant stride towards enhancing transparency in the sector. Fintechs will regularly update various details, including activities, products, technology stacks, and financial information.
Ramesh Narasimhan of Worldline India said the higher payment caps will potentially facilitate smoother and more substantial payments in these two crucial sectors, while higher caps for e-mandates for mutual fund subscriptions, insurance premium subscriptions, and credit card repayments will lead to more rapid adoption of digital payments.
J S Bhawalkar of DY Patil Medical College Hospital & Research Pune said the enhancement of UPI payment limit to the healthcare sector will be of significant operational benefits to both hospitals and patients or their families.
