UPI Circle Feature: How It Benefits Users and Essential Safety Tips | NPCI’s Latest Innovation Explained

In Short:

• UPI Circle: NPCI’s new UPI Circle feature allows two individuals to share a single bank account for UPI transactions, aiding those with technical barriers like seniors and children.
• Delegation Options: Offers full or partial delegation, letting primary users control transaction limits and security.
• Security: Ensures secure transactions with password, biometric authentication, and fraud prevention measures.

MC Explains: How NPCI’s New UPI Circle Feature Benefits Users and Precautions to Take

The National Payments Corporation of India (NPCI) has introduced a new feature, UPI Circle, aimed at making digital payments more accessible and manageable for a broader range of users. This feature is particularly beneficial for individuals who may find it challenging to navigate the complexities of digital finance, such as senior citizens and children. UPI Circle allows two individuals to share a single bank account for making UPI payments, bridging the gap for those who face technical barriers.

What is UPI Circle?

The UPI Circle feature empowers two individuals to use a single bank account for UPI transactions. This is a significant step forward in ensuring financial independence for those who rely on others for managing their finances. The feature enables a primary user, like a parent, to delegate transaction authority to a secondary user, such as a child or an elderly family member. This means that even if a person does not have their own bank account, they can still conduct transactions using the primary user’s account.

Rahul Jain, CFO of NTT DATA Payment Services India, explains, “This feature is particularly beneficial for family members such as senior citizens, spouses, or children who may not have their own bank account or typically rely on a shared family account for financial transactions.”

Ambuj Chandna, Head of Products at Kotak Mahindra Bank, adds, “UPI Circle is likely to bring ease and convenience in managing day-to-day payments, reducing the need for cash, and making a positive impact on the lives of millions of UPI users.”

Delegation Options: Full vs. Partial

UPI Circle offers two delegation options: full delegation and partial delegation. Each option comes with specific features and security measures to ensure safe and controlled usage.

• Full Delegation: In this mode, the primary user grants the secondary user full authority to initiate and complete transactions within predefined spending limits. For instance, a monthly limit of Rs 15,000 and a maximum per transaction limit of Rs 5,000 can be set by the primary user. Once these limits are set, the secondary user can make payments without needing further approval.
• Partial Delegation: This option allows the secondary user to initiate transactions, but the primary user retains control. The primary user must authenticate and finalize each payment using their UPI PIN, adding an extra layer of security.

These delegation options make UPI Circle flexible and secure, catering to different user needs while maintaining control over financial transactions.

Key Guidelines for UPI Circle Users

To ensure a secure experience, NPCI has laid out comprehensive guidelines for UPI applications and payment service providers (PSPs). Both primary and secondary users are required to use a password and biometric authentication, such as fingerprint or face recognition, to lock and unlock the UPI app.

When linking a secondary user, the primary user must scan a unique QR code or enter the secondary user’s UPI ID. This step ensures that the correct person is linked to the account, with manual entry of mobile numbers being prohibited for added security. Additionally, a primary user can delegate transaction authority to up to five secondary users, while a secondary user can only accept delegation from a single primary user.

Benefits to Consumers

UPI Circle is expected to enhance financial inclusion, particularly in rural areas where technology adoption may be slower. By allowing controlled spending, it helps primary users monitor and manage financial activities effectively, ensuring budget discipline and transparent accountability.

Ajay Rajan, Country Head at YES Bank, highlights that “This innovation will not only drive convenience but also enhance security by reducing the risk of fraud within these trusted ecosystems.”

Precautions for UPI Users

To maximize the benefits of UPI Circle while minimizing risks, users should be aware of potential fraud. Secondary users should be regularly informed about the latest UPI fraud trends and prevention strategies. Strong user authentication, robust payment infrastructure, and fraud detection systems should be in place to protect against UPI scams in delegated payments.

As NPCI continues to innovate, features like UPI Circle are set to make digital payments more accessible, secure, and convenient for all users, especially those who may face challenges in managing their finances independently.