UPI Introduces New Feature: UPI Circle Allows Transactions Without Linked Bank Account

New Delhi – The digital payment landscape in India is evolving with the introduction of a new feature, "UPI Circle," by the National Payments Corporation of India (NPCI). Launched by RBI Governor Shaktikanta Das at the Global Fintech Festival (GFF) 2024, this feature is set to make UPI transactions more accessible, even for those without a linked bank account.

What is UPI Circle?

UPI Circle is a groundbreaking feature that allows users to make UPI payments without having a bank account linked to UPI. This innovation is especially beneficial for individuals who do not use online banking. With UPI Circle, users only need a mobile number and an OTP (One-Time Password) to complete transactions, making digital payments more inclusive and convenient.

How Does UPI Circle Work?

In the UPI Circle system, there are two types of users: the Primary User and the Secondary User. The Primary User is the person with a UPI ID linked to their bank account, while the Secondary User is someone added to the UPI Circle by the Primary User. The Secondary User can then make UPI payments using the Primary User's account, subject to permissions granted by the Primary User.

For example, a father could add his son as a Secondary User to his UPI Circle, allowing the son to make partial or full payments from the father's account, depending on the permissions set.

Benefits of UPI Circle

1. Parental Control: Parents can monitor and control their children's UPI transactions, ensuring responsible usage.
2. Account Management: Managing bank accounts for family members, like children or elderly parents, becomes easier without conflict.
3. Business Use: For startups and companies, UPI Circle allows up to five employees to make bill payments from a single account, with all transaction details consolidated in one place.

Drawbacks of UPI Circle

Despite its advantages, UPI Circle has some limitations. The Secondary User is entirely dependent on the Primary User for making transactions, and they must seek permission before proceeding with any payment.

Conclusion

UPI Circle is a significant step forward in India's digital payment ecosystem, offering new opportunities for inclusive financial management. While it presents some challenges, the feature's benefits, particularly for families and small businesses, make it a valuable addition to UPI's already robust offerings.

For more updates on digital payment innovations and other financial news, stay tuned.