UPI Circle launched for designated secondary users. Know features, monthly cap, guidelines for usage

UPI Circle: Reserve Bank of India Governor Shaktikanta Das launched UPI Circle at the Global Fintech Festival (GFF) 2024. The new feature will allow UPI users to authorise payments to their designated secondary users. 

UPI Circle is a feature that allows customers to connect with trusted secondary users on the UPI app, enabling them to delegate either partial or full payment responsibilities.

In the case of full delegation, a primary user can empower a designated "trusted" secondary user to initiate and finalize UPI transactions on their behalf while adhering to specified spending limits. The National Payments Corporation of India (NPCI) has set a monthly cap of Rs 15,000 per delegation and a transaction limit of Rs 5,000 for full delegation scenarios.

Conversely, partial delegation permits a primary user to authorize a secondary user to commence payment requests. The primary user can then finalize the UPI transaction by entering their UPI pin.

UPI Circle will enable an individual designated as the primary user, such as a parent, to assign transaction authorization to another individual appointed as the secondary user, for example, a child or senior citizen. This delegation empowers the secondary user to conduct financial transactions, specifically payments, using the primary user's account.

NPCI guidelines specify that a primary user can delegate tasks to a maximum of five secondary users, with each secondary user being allowed to receive delegation from only one primary user. Normal UPI transaction limits apply in cases of partial delegation as well, as confirmed by the payments regulatory body.

NPCI said: “In partial delegation, the primary user authorizes initiation of payment requests from secondary users. The primary user then completes the UPI transaction with UPI Pin. A primary user can delegate to up to 5 secondary users and a secondary user can accept delegation from only one primary user.”
Existing UPI limits shall be applicable in case of partial delegation.

How will it work

> Primary users: Primary user who has an UPI account can set up UPI Circle for secondary users like their trusted contacts. The primary user has complete authority to determine which individuals may access their account for UPI transactions. They have the ability to establish transaction thresholds and oversee all account operations.

Through the Full Delegation feature, the primary user is empowered to define the maximum monthly expenditure limit for the secondary user. The primary user retains oversight of all transactions conducted using the delegated authorization. This functionality streamlines financial management for family members or dependents, enabling them to handle expenses without needing access to the primary user's complete banking information.

> Secondary users: The secondary user under partial delegation has limited capabilities, being restricted to making payments to merchants and individuals only. They do not have the authority to set UPI autopay or lite transactions. However, with full delegation, it may be feasible to establish customized monthly limits for each secondary user.

Guidelines

The National Payments Corporation of India (NPCI) has devised comprehensive guidelines for UPI applications and payment service providers (PSPs) to ensure a secure and smooth user experience.

Both primary and secondary users will receive a password and undergo biometric authentication (fingerprint or face recognition) to lock and unlock the app efficiently.

Users are empowered to pick their desired UPI app, enabling them to select the most fitting application, manage their accounts and transactions autonomously, and relish a secure and seamless payment journey.

In order to link the secondary user, the primary user must either scan a unique QR code or input the secondary user's UPI ID.

After scanning the Quick Response (QR) code or entering the Unified Payments Interface (UPI) ID, the primary user will proceed to select the secondary user's contact from their device's contact list. This verification step guarantees that the intended secondary user is properly linked to the primary user's account. As an added security measure, the system restricts the manual input of mobile numbers to prevent any errors or fraudulent activities.

Additionally, it's worth noting that a primary user has the ability to assign transaction authorization to a maximum of five secondary users. Conversely, a secondary user is limited to receiving delegation from only one primary user. This rule aims to maintain a clear hierarchy and prevent misuse of transaction privileges within the system.

In the August RBI MPC meeting, Shaktikanta Das, Governor, RBI, said UPI Circle would allow the primary user to authorise another individual to make UPI transaction even without a separate UPI-linked bank account.

"Delegated Payments would allow an individual (primary user) to set a UPI transaction limit for another individual (secondary user) on the primary user’s bank account. This product is expected to add to the reach and usage of digital payments across the country. Detailed instructions will be issued shortly," the central bank said in its MPC meeting.