How NPCI’s New UPI Circle Feature Benefits Users and What Precautions to Take
Consider scenarios where your parents struggle with mobile phone use or haven’t fully grasped UPI (Unified Payments Interface), or if you want to provide pocket money to your children without excess. The UPI Circle feature addresses these situations by allowing multiple individuals to manage UPI transactions from a single bank account.
What is UPI Circle?
UPI Circle is a new feature that enables two individuals to use a single bank account for UPI transactions. It is designed to help those who depend on others for financial management gain more control over their transactions. The primary user, such as a parent, can delegate transaction authority to a secondary user, like a child or senior citizen, to make payments from the primary user’s account.
Delegation Options
The primary user must explicitly authorize the secondary user for either full or partial delegation, detailing the scope of transaction authority.
Full Delegation
In full delegation, the primary user gives the secondary user complete authority to initiate and complete transactions within predefined spending limits. To ensure control, the primary user must set a monthly limit of Rs 15,000 and a maximum per transaction limit of Rs 5,000. Once authorized, the secondary user can perform transactions within these limits without further approval from the primary user.
Partial Delegation
In partial delegation, the secondary user can initiate transactions, but the primary user retains control and must authenticate and finalize each payment using their UPI PIN. This adds an extra layer of security and verification.
Key Guidelines for UPI Circle
NPCI has outlined comprehensive guidelines for UPI applications and payment service providers (PSPs) to ensure a secure user experience. Both primary and secondary users will have a password and biometric authentication (fingerprint or face recognition) for app security. Users can choose their preferred UPI app to manage their accounts and transactions securely.
To link a secondary user, the primary user must scan a unique QR code or enter the secondary user’s UPI ID. This process ensures the correct secondary user is linked to the primary user’s account, with manual entry of mobile numbers not permitted.
A primary user can delegate authority to up to five secondary users, while a secondary user can accept delegation from only one primary user.
Benefits to Consumers
UPI Circle can enhance financial inclusion in rural areas where technology adoption might be slower compared to urban areas.
Precautions for UPI Users
Secondary users should be regularly educated about current UPI fraud trends, tactics, and prevention methods. This education will help them stay vigilant, recognize potential threats, and take proactive steps to protect their financial information and transactions.
Some FAQs to clear concerns:
Who Can Use UPI Circle?
A UPI Circle can be set up by any primary user who has an active UPI account. This feature allows them to designate trusted contacts as secondary users who can manage UPI transactions from the primary user’s account.
How Does Authorization Control Work?
The primary user maintains complete control over who has access to their account for UPI transactions. They can set specific transaction limits and oversee all activities conducted by secondary users.
Can I Set a Spending Limit for Secondary Users?
Yes, under Full Delegation, the primary user can establish a monthly spending limit for the secondary user, controlling how much they can spend within that period.
Do Secondary Users Need Their Own Bank Accounts to Use This Feature?
No, secondary users do not need their own bank accounts to utilize UPI Circle. This feature is designed to assist individuals who might not have their own bank accounts.
Can I monitor transactions made by the secondary user?
Yes, the primary user has the ability to oversee and track all transactions carried out by the secondary user through the delegated access.
How does this feature assist with managing family expenses?
UPI Circle simplifies family expense management by allowing family members or dependents to handle transactions without needing access to the entire bank account of the primary user.
Can secondary users perform all types of UPI transactions?
Under partial delegation, secondary users are limited to making payments to merchants and individuals. They do not have the ability to set up UPI autopay or conduct lite transactions.
Can I assign different transaction limits to various secondary users?
Yes, it is possible to set different monthly spending limits for each secondary user under full delegation.
Is this feature available on all UPI apps?
You should verify with your chosen UPI app or bank to determine if they support this feature.
Conclusion
The UPI Circle feature from NPCI offers a practical solution for managing UPI transactions, particularly beneficial for those who need assistance with digital payments or wish to provide controlled access to funds. By allowing primary users to delegate transaction authority with customizable limits and oversight options, it simplifies financial management for families and individuals with varying needs. However, users should be cautious and stay informed about potential fraud risks, ensuring secondary users are well-educated on security practices. This feature aims to enhance financial inclusion and streamline expense management, making digital transactions more accessible and secure.
