Reserve Bank governor Shaktikanta Das during the monetary policy committee (MPC) presser made some big announcements. Besides keeping the lending rate steady at 6.50 per cent, Das announced big updates on unique payments interface (UPI) transactions in the country.
During his monetary policy committee briefing, Das made three big announcements.
1. The RBI MPC announced ‘conversational payments’ on UPI. Soon, the users will be able to engage in conversation with AI-powered systems while making payments.
“This channel will be made available in both smartphones and feature phones-based UPI channels, thereby helping in the deepening of digital penetration in the country”, PTI quoted the RBI governor as saying.
“The implementation of conversational payments using UPI is a significant concept. Users will be able to start and authorise transactions using natural language interactions, enabling the procedure for making payments more easy and convenient”, Suren Goyal, partner, RPS Group, told Hindustan Times.
2.The RBI introduced offline payments on UPI using Near Field Communication (NFC) technology through ‘UPI-Lite’ on-device wallet.
What is Near Field Communication?
Near field communication is defined as a short-range wireless technology that helps in transferring information between devices quickly and easily with a single touch, website Investopedia states.
NFC, as it is popularly called, uses magnetic field induction for communication between devices when they are touched together.
It has numerous benefits including boosting operational efficiency for payment processors and ensuring more security than credit cards for payments. It allows users to pick from multiple cards dynamically.
However, it does have limitations like having a short range of only a few inches. Besides this, it can limit the usage of apps which require sensitive data on a smartphone.
3. The third most important announcement is related to increasing the transaction limit for small value digital payments in off-line mode from ₹200 to ₹500 within the overall limit of ₹2000 per payment instrument.
“The overall limit is, however, retained at ₹2,000 to contain the risks associated with relaxation of two-factor authentication and instructions in this regard will be issued shortly”, the RBI governor had said.
(With inputs from PTI)
