RBI’s user friend technology focus on UPI in move towards cashless economy

Conversational, offline and enhancement of limits for small transactions in the Unified Payments Interface (UPI) are some of the measures for payment systems that the Reserve Bank of India Governor Shaktikanta Das announced on Thursday.

Amid announcement of the decisions of the three day meeting of Monetary Policy Committee (MPC), Das said to harness new technologies and enhance the digital payments experience it is proposed to enable "Conversational Payments" on UPI, which will enable users to engage in conversation with artificial intelligence (AI) powered systems to make payments; introduce offline payments on UPI using Near Field Communication (NFC) technology through ‘UPI-Lite’ on-device wallet; and enhance the transaction limit for small value digital payments in off-line mode from Rs 200 to Rs 500 within the overall limit of Rs 2,000 per payment instrument.

"These initiatives will further deepen the reach and use of digital payments in the country," he added.

According to RBI, the UPI has transformed the digital payment ecosystem in India. As AI is becoming increasingly integrated into the digital economy, conversational instructions hold immense potential in enhancing ease of use, and consequently reach, of the UPI system, it said.

"It is, therefore, proposed to launch an innovative payment mode viz 'Conversational Payments' on UPI, that will enable users to engage in a conversation with an AI-powered system to initiate and complete transactions in a safe and secure environment," the RBI said.

This channel will be made available in both smartphones and feature phones-based UPI channels, thereby helping in the deepening of digital penetration in the country.

The facility will, initially, be available in Hindi and English and will subsequently be made available in more Indian languages.

"This innovative approach is poised to empower customers with more seamless, transparent, and convenient payment solutions. Leveraging the capabilities of AI will further streamline payment transactions within a secure environment. This not only highlights the potential for 'Make in India' solutions to gain global recognition, particularly in technology-driven nations where AI is pervasive but also highlights India's pioneering role in the digital payments’ domain," said Rahul Jain, Chief Financial Officer, NTT DATA Payment Services India.

To promote the use of UPI-Lite, it is proposed to facilitate offline transactions using Near Field Communication (NFC) technology. This feature will not only enable retail digital payments in situations where internet/telecom connectivity is weak or not available, it will also ensure speed, with minimal transaction declines.

A limit of Rs 200 per transaction and an overall limit of Rs 2,000 per payment instrument has been prescribed by the RBI for small value digital payments in offline mode, including for National Common Mobility Card (NCMC) and UPI Lite.

"This strategic measure will stimulate digital transactions for minor purchases, effectively curbing cash usage and fostering the growth of a cashless economy," Jain added.