UPI's Technical Upgrade: What You Need to Know in 2023

UPI Technical Upgrade: Enhancing Digital Payments

India’s Unified Payments Interface (UPI) is set to undergo a significant technical upgrade starting August 1, 2023. The National Payments Corporation of India (NPCI), which manages UPI, is directing banks and payment service providers to implement new Application Programming Interfaces (APIs) and adhere to stricter technical standards. This initiative aims to ensure a more reliable experience for users.

What Changes to Expect?

The upcoming changes include:

• Balance Enquiry Limits: Users can check their bank balance up to 50 times per UPI app daily.
• Limited Linked Accounts: A maximum of 25 accounts can be linked to a single UPI ID or phone number.
• Autopay Mandate Execution: Users can create mandates for payments anytime, but execution will occur only during non-peak hours (10 pm to 7 am and 1 pm to 3:30 pm).
• Mandatory Account Balance Notification: Banks are required to include account balances in transaction notifications, reducing duplicate balance checks and enhancing system efficiency.
• Check Transaction Limit: Banks must ensure that check transaction APIs, which verify transactions, are not excessively used to prevent unnecessary system strain.

Why Are These Changes Necessary?

The UPI platform currently handles billions of transactions each month, and with the increasing usage, disruptions and outages have become more frequent. The reasons for these upgrades include:

• To prevent UPI system overload during peak transaction hours.
• To ensure fair usage of resources by banks and payment applications.
• To reduce delays and failed transactions caused by system congestion.
• To maintain the robustness and efficiency of UPI as digital payment adoption continues to grow in India.

A significant issue has been the excessive balance checks and check transaction API calls, which have increased system load and risked slower transactions. These technical adjustments aim to balance demand and capacity, ensuring users can enjoy a seamless experience.

Quotation for Future Civil Servants: “Efficiency is doing better what is already being done.” — Peter Drucker.

Frequently Asked Questions (FAQs)

Q1. What is UPI and how does it work?
Answer: UPI is a digital payment system that allows users to transfer money between bank accounts using their mobile devices. It facilitates instant money transfers through a mobile application.

Q2. Why are there limits on balance enquiries in UPI?
Answer: Limits on balance enquiries help reduce system load and improve efficiency during peak transaction times, ensuring a smoother user experience.

Q3. What are the new execution hours for autopay mandates?
Answer: The new execution hours for autopay mandates are from 10 pm to 7 am and 1 pm to 3:30 pm, aimed at reducing system congestion.

Q4. How many accounts can be linked to one UPI ID?
Answer: A maximum of 25 accounts can be linked to a single UPI ID or phone number, according to the new guidelines.

Q5. What is the purpose of mandatory account balance notifications?
Answer: These notifications help reduce the number of duplicate balance checks and improve the overall efficiency of the UPI system.

UPSC Practice MCQs

Question 1: What is the primary purpose of UPI's recent technical upgrade?
A) To increase transaction fees
B) To enhance user experience and system reliability
C) To limit the number of transactions
D) To reduce digital payments in India
Correct Answer: B

Question 2: How many times can a user check their bank balance per day under the new UPI guidelines?
A) 25 times
B) 50 times
C) 100 times
D) Unlimited
Correct Answer: B

Question 3: What is the limit of linked accounts to a single UPI ID according to the new rules?
A) 5 accounts
B) 15 accounts
C) 25 accounts
D) 30 accounts
Correct Answer: C

Question 4: During which hours will autopay mandates be executed?
A) All day
B) Only during peak hours
C) Non-peak hours only
D) Only on weekends
Correct Answer: C

Question 5: What change has been made regarding transaction notifications in UPI?
A) They will no longer be sent
B) They must include account balances
C) They will be delayed
D) They will be optional
Correct Answer: B

Question 6: What is one of the goals of the new UPI guidelines?
A) To increase the number of daily transactions
B) To prevent system overload during peak hours
C) To limit the use of digital payments
D) To decrease user engagement
Correct Answer: B

Question 7: Which organization manages the Unified Payments Interface (UPI)?
A) Reserve Bank of India
B) National Payments Corporation of India
C) Ministry of Finance
D) State Bank of India
Correct Answer: B