In one of the biggest steps taken toward enriching digital payment solutions, the National Payments Corporation of India unveiled a never-before feature for its Unified Payments Interface platform.
The newly launched “UPI Circle-Delegate Payments” would let primary account holders share their UPI accounts with trusted individuals for performing transactions on their behalf.
This is expected to change the way families and small groups can do things regarding money with an element of convenience and control.
What is UPI Circle-Delegate Payments?
The UPI Circle-Delegate Payments feature is designed to allow a primary UPI user to delegate the payment capability from time to time to some other secondary users in the circle, be it his or her family members or close acquaintances that he or she knows and trusts.
The feature, according to K V Sheetal, Chief General Manager, Digital Banking Operations at Bank of Baroda, would link secondary individuals to their UPI accounts partially or fully.
This will be very helpful in families whose members do not have individual bank accounts, and also in cases where multiple people use the same bank account.
This feature is very beneficial in cases of senior citizens, spouses, children, etc., who depend on another bank account, says Rahul Jain, CFO of NTT DATA Payment Services India.
How Does It Work?
The process of setting up UPI Circle-Delegate Payments is quite simple.
Basically, a primary user initiates the delegation process with the creation of a mandate for the secondary user. According to Shravan Shetty, managing director of Primus Partners, it can be set up for full or partial delegation.
In full delegation, the secondary user has the right to pay any amount up to a certain limit directly without needing any further approval.
However, with partial delegation, every transaction requires an approval request by the secondary user to the primary user. This process hence involves additional control and security assurance. The system keeps a perfect account of all permissions set on the accounts and enforces the set transactional limits, making it both safe and smooth.
Transaction Limits and Security Measures
It has also laid down some limits to transactions by NPCI in view of the continuous keeping of control and security for UPI Circle-Delegate Payments. In the case of full delegation, Rs 15,000 remains the maximum limit per month, with a single transaction limit of Rs 5,000.
For partial delegation, existing UPI limits would apply. No misuses must be ensured; it still gives adequate flexibility for day-to-day transactions.
Given the enhanced concern related to UPI scams, NPCI has underlined robust security protocols.
Any request for delegation undergoes two-factor authentication, making sure that only the primary account holder can approve transactions.
Further, the primary user is shown real-time notifications for each transaction; thus, users can keep monitoring and acting on any suspected activity easily.
How Can It Benefit UPI Users?
Thus, the main importance of UPI Circle-Delegate Payments will be within households where only one member has banking access.
It does so by filling this gap between banked and unbanked users, finally including unbanked users who do not have individual accounts in digital transactions.
It is a feature that allows parents to manage expenses of their children in cities easily and also helps people in rural areas where family members can conduct simple transactions without opening a bank account.
A farmer, for example, can use this to authorize a family member to purchase agricultural supplies or even pay school fees quite easily, thus making budgeting easier in households with limited access to banking.
But What about UPI Scams? Will they rise after this efatures
While bringing a host of advantages, UPI Circle-Delegate Payments also bring with them an added responsibility of protecting users from fraud.
According to Sampad Swain, Co-founder & CEO, Instamojo, every user should have rigid transaction limits and should turn on real-time notifications in order to save themselves from scams.
Another very important element in avoiding fraudulent transactions is user education on not sharing sensitive information like PINs or OTPs.
This new feature will make shared financial management easier and more secure than ever, provided appropriate security measures are in place.
As digital payments evolve, features like UPI Circle-Delegate Payments are set to enhance financial inclusivity.
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