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Here’s a roundup of new regulations for online payments, UPI in Budget 2022 

According to data statistics, India’s digital payments industry is one of the fastest-growing industries today in the country with impressive growth on paper. In the last few years, the charge of complete digitization of payments in the person-to-person as well as person to merchant market segments is all due to the digital payment industry of the country. The Unified Payments Interface also known as UPI is one of the leading reasons behind the increasing popularity as well as usage of online payments today with different mobile applications available for completing transactions. Even with the current UPI transaction limit per day, the number of users active on the platform every day is increasing significantly. The current UPI transaction limit per day includes a transaction limit of Rs. 2,00,00 only. Other than this, the UPA transaction limit per day for the number of transactions to be conducted is limited to only 20 transactions in a day.

In regards to the Union Budget 2022-23, it was expected by the finance minister to further add more strength to the current digital payment ecosystem by increasing the opportunities available for the end-users today, while including digitization as part of the overall financial inclusion plan. Market studies suggest that an approximately 33% growth rate was witnessed by the digital payments ecosystem in the country when India made approximately 8.27 crores worth of transactions by the end of February 2022. 

These numbers directly indicate the increased use of UPI transactions within the last year with almost double digits by the end of this financial year. One of the major reasons behind the growth of UPI payments and transactions in India is the switch from physical interaction with retailers, to online payments, ever since the global pandemic hit the country. Let us take a sneak peek into the budget 2022 around UPI regulations below.

Union Budget 2022 For Digital Payments 

For the banking sector in the Union Budget 2022, the key focus areas consisted of India’s very own first digital currency, increasing credit lines for small businesses, pushing digital banking further, and adding amendments to strengthen the law bankruptcy in the country. Furthermore, the finance minister further announces the expenditure or capital of Rs.75,00,00, crores for the financial year of 2023, hinting toward the potential opportunity of big lending for corporate banks and public banks on a larger scale. The regulations included the following:

  • Introduction of a digital rupee by the reserve bank of India to be made in the financial year 2022-23. The idea is to give the digital economy a boost to further lead to a more efficient currency management system. The new currency will be established using technologies like Blockchain to facilitate quicker payments and lending opportunities.
  • For the adoption of different digital banking services, 75 different digital banking units in a range of districts will be also set up by chosen commercial banks to push digital banking in semiurban and rural India further. Additionally, the government is also coming up with practices to boost the overall ecosystem of the fintech industry to promote the use of payment platforms like UPI, that is economical and highly user-friendly.
  • Another important announcement around the digital banking industry’s future is the coverage of a hundred percent of the post office banks under the core banking umbrella for a further boost in the financial inclusion plan of action.
  • However, for the UPI digital payment scheme, the lack of announcements around The zero merchant discount rate for the same can be a disadvantage. According to data, approximately Rs. 5,500 crores were lost due to the zero MDR rule in the past but the UPI transactions at the end of December 2021 came up to be a value of $1.7 trillion. Additionally, even though the UPI transaction limit per day has not been revised and the union budget 2022-23, the adoption rate of the Indian UPI market is approximately 87% when the global average only comes down to 64%.
  • Another addition on the list which is not a direct part budget 2022-23 is the launch of UPI payments without the use of the internet by the RBI. At present, the UPI system and the UPI transaction limit per day are limited to mobile phones with NFC. However now, on March 8, 2022, RBI launched a new digital model of payment that does not use the internet called the UPI 123Pay. This feature will further allow the population without an active internet connection or a smartphone to complete online payments and transactions with the help of UPI payment in just a few steps. There are multiple ways this will work including a voice-based system, the mobile application, a missed call mechanism mode, sound-based payments, etc.

To conclude, the UPI transaction limit per day plays a vital role in planning the plan of action forward. Given the increasing usage of different mobile applications for payments and transactions, the finance minister for the union budget 2022-23, put in an extra effort to support and promote the financial inclusion of different digital payment options to push the adoption of payment methods like UPI by one and all in the country. This is introduced as a systematic approach to completed transactions and/or taking or giving money from one person to another. For both people to person as well as person to merchant payments, UPI is known to be the future of the same and thus getting on board is the right way forward.

Cary Grant
Cary Grant
Cary Grant, the enigmatic wordsmith hailing from the UK, is a literary maestro known for unraveling the intricacies of life's myriad questions. With a flair for delving into countless niches, Grant captivates readers with his insightful perspectives on issues that resonate with millions. His prose, a symphony of wit and wisdom, transcends boundaries, offering a unique lens into the diverse tapestry of human curiosity. Whether exploring the complexities of culture, unraveling philosophical conundrums, or addressing the everyday mysteries that perplex us all, Cary Grant's literary prowess transforms the ordinary into extraordinary, making him a beacon of intellectual exploration.


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