Digital payments in India are set to become even more inclusive and convenient with the introduction of a groundbreaking feature known as UPI Circle. Launched by the National Payments Corporation of India (NPCI), UPI Circle allows the primary holder of a UPI account to delegate transaction rights to secondary users. This innovative feature enables multiple individuals to use the same bank account for UPI payments while maintaining specific controls to ensure security and accountability.
What is UPI Circle?
UPI Circle is a feature designed to extend the utility of UPI (Unified Payments Interface) by allowing a primary user (account holder) to delegate transaction capabilities to secondary users. This means trusted individuals, such as family members or close friends, can be granted access to the UPI account to make payments, subject to certain conditions and limitations set by the primary user.
How UPI Circle Works
Primary User: The primary user is the account holder who initiates the UPI Circle. They have the authority to delegate transaction rights and control the extent of access granted to secondary users.
Secondary User: A secondary user is a trusted individual who receives partial or full access to the UPI account. Their transaction rights are defined by the primary user.
Types of Delegation
- Full Delegation: The secondary user can make payments up to a specified limit without needing the primary user’s approval for each transaction.
- Partial Delegation: The secondary user can initiate payment requests, but the primary user must approve and complete the transaction with a UPI PIN.
Key Benefits
- Convenience: Multiple users can access the same UPI account for payments, simplifying financial management within families or small groups.
- Financial Inclusion: UPI Circle enables individuals without their own bank accounts to participate in digital payments, enhancing financial inclusion.
- Control: The primary user retains control over transaction limits and overall account access, ensuring secure and regulated use of the account.
NPCI Guidelines on UPI Circle
The NPCI has issued comprehensive guidelines to ensure the secure and efficient functioning of UPI Circle. Here are the key points:
- Independent User Journeys: UPI apps and PSPs (Payment Service Providers) must offer separate user journeys for primary and secondary users, allowing them to choose their preferred UPI app.
- Mandatory Security Measures: UPI apps must enforce app passcodes or biometric authentication (fingerprint/face recognition) for all secondary users.
- Linking Process: The primary user initiates the linking process by scanning a QR code or entering the UPI ID of the secondary user, followed by selecting the contact number from the contact list.
- User Limits: A primary user can delegate transaction rights to up to five secondary users, while a secondary user can accept delegation from only one primary user.
- Delegation Authorization: Members must ensure that the primary user authorizes the secondary user for either full or partial delegation.
- Transaction Limits: For full delegation, there is a maximum monthly limit of Rs 15,000 and a per transaction limit of Rs 5,000. Existing UPI limits apply for partial delegation.
- Cooling Period: During the first 24 hours after linking, a daily transaction limit of Rs 5,000 is enforced for both full and partial delegation.
- Transaction Visibility: The primary user must have visibility of transactions performed by secondary users on their UPI app and bank account statement.
- Compliance with RBI Guidelines: Members must adhere to RBI guidelines regarding transaction turnaround time and customer compensation for failed transactions.
- Online Dispute Resolution: Functionality for resolving disputes related to UPI transactions must be available.
- Reconciliation Process: The reconciliation process must follow existing UPI guidelines. A new purpose code will be introduced to identify UPI Circle transactions in settlement reports. Additional raw files with secondary user details will be shared with the relevant PSPs and banks.
UPI Circle is poised to revolutionize digital payments in India by making them more accessible and convenient. By allowing primary users to delegate transaction rights to trusted secondary users, UPI Circle not only enhances financial inclusion but also provides a secure and controlled environment for shared financial management. With the robust guidelines laid out by NPCI, users can be assured of a safe and efficient digital payment experience.
