The RBI is going to simplify process flow through a new “on-device” wallet for small value UPI transactions. The Central Bank is also going to launch a UPI-based payment product for feature phone users.
In the ‘Statement on Developmental and Regulatory Policies’ released today (December 8, 2021), the Reserve Bank of India (RBI) announced proposals to ease the process for small value transactions and popularise UPI payment through feature phones.
UPI for Feature Phone Users
Currently, feature phone users can use NUUP (National Unified USSD Platform) as an option for availing basic payment services using the shortcode of *99#. However, the use of this feature has not picked up. Hence, the central bank has proposed to launch a UPI-based payment product for feature phone users.
“It is proposed to launch a UPI-based payment product for feature phone users,” the RBI said, adding that more details will be announced shortly.
According to RBI’s statement, India has a mobile phone consumer base of about 118 crore mobile users, of which about 74 crores have smartphones.
New on device wallet to simplify small value transactions
The RBI said that one of the initial objectives of UPI was to replace cash for low-value transactions.
“Transaction data analysis shows that 50 per cent transactions through UPI were below Rs 200, indicating its success. These low-value transactions, however, utilise significant system capacity and resources, at times leading to customer inconvenience due to transaction failures because of issues related to connectivity,” RBI said.
“It is, therefore, proposed to offer a simpler process flow by enabling small value transactions through an “On-device” wallet in UPI app which will conserve banks’ system resources, without any change in the transaction experience for the user,” RBI added.
The central bank has also proposed to increase UPI transaction limit to up to Rs 5 lakh for the Retail Direct Scheme and IPO applications.