UPI Circle launched: What is it? How does it work? How to set it up?

By Team Asianet Newsable | First Published Sep 6, 2024, 1:45 PM IST

The National Payments Corporation of India (NPCI) has introduced "UPI Circle," a feature allowing primary users to grant limited transaction access to secondary users. This initiative aims to enhance financial inclusion and convenience for individuals who may not have their own bank accounts or prefer not to engage in digital transactions directly.

The National Payments Corporation of India (NPCI) has launched a new feature called "UPI Circle", aimed at enhancing digital payment accessibility. With the use of this new functionality, primary users may now add friends and family as secondary users, allowing them to access the primary user's bank account for transactions up to certain restrictions.

Its purpose is to make UPI transactions more convenient for people who do not have bank accounts of their own or are wary of making digital payments. The capability is intended to enable secondary users who may be financially reliant to utilise UPI, according to NPCI.

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The features of "UPI Circle" were described by NPCI in a press release. According to the agency, secondary users—like family members or coworkers—can now receive payment authorisation from primary users, allowing them to conduct transactions straight from the original user's account.

This function is anticipated to be especially helpful for elderly individuals who are wary of making digital transactions, parents who give their kids allowances, and company owners who have to handle petty cash for their employees.

The feature does come with layers of intervention and security measures. Once added, primary users will have the option to set spending limits or require approval for each transaction. While the "Approve Every Payment" option gives the principal user more control by demanding their permission for every transaction, the "Spend With Limits" option enables secondary users to make payments within predetermined limits without requiring further approval.

A single transaction cannot exceed Rs 5,000, with the maximum monthly limit imposed by NPCI at Rs 15,000. Additionally, the secondary user will have a Rs 5,000 restriction for the first 24 hours. The agency claims that the principal user will be able to keep an eye on what the secondary users are doing on the app. For several secondary users, a primary user can establish multiple maximum limitations (under Rs 15,000).

Approximately 6% of UPI users do a high volume of transactions, mostly as a result of their ability to execute transactions on behalf of others. This capability will provide greater simplicity when making delegated payments while maintaining the same level of control for the principal user, according to an NPCI statement.

How to set up UPI circle:

Go to the Circle Menu on UPI: Tap "Add Family or Friends"
To add someone, enter a backup UPI ID, scan their UPI QR code, or go through your phone contacts.
Assign Rights: "Spend With Limits" or "Approve Every Payment" are your options.
A notice inviting the secondary user to approve the request will be sent.
Secondary users can begin utilising the primary user's UPI account to make payments after they've been accepted.

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