You can let your family members use your UPI account for payments, RBI introduces delegate payments

If you have a younger sibling, chances are that you’ve turned down their request for some money by saying you aren’t carrying your wallet or are simply not carrying enough cash. Well, here is some bad news—you might not be able to give this excuse in the near future. RBI has recently introduced delegate payments. And this means that your UPI account can now be used by others to make payments.

UPI payments from a single account

As mentioned already, a single UPI account can now be used by other users to make payments from the same account. RBI introduced the feature, called delegated payments, during the August monetary policy review.

The feature allows a primary user to authorise another individual, such as a family member or employee, to make transactions from their bank account. The primary user sets limits on these transactions, giving them control while enabling others to manage finances within predefined boundaries.

RBI Governor Shaktikanta Das highlighted the potential of this feature to expand digital payment usage across diverse segments of society. "Delegated Payments will enhance financial inclusivity, especially in rural areas where banking access is limited," Das said as per a TOI report.

Mohit Bedi, Co-Founder and CBO of Kiwi, a third-party payments application, told ET that this feature could transform how UPI is used by families. "The RBI is essentially making parents the approving authority for transactions, which means UPI can now be used by minors with parental oversight," Bedi said.

Only permissible through savings accounts

But can all types of accounts make payments using this new feature? Not really.

It is important to note that these delegated transactions will only be permissible through savings accounts, excluding credit lines or credit cards, as industry experts confirm. This focus on savings accounts underscores a commitment to secure and manageable transactions.

In addition to delegated payments, the RBI also raised the limit for tax payments via UPI. Previously capped at Rs. 1 lakh per transaction, the new limit is of Rs 5 lakh. With this increase, taxpayers can avoid the cumbersome NEFT process, which requires manual entry of account details, and benefit from the speed and convenience of UPI.

On a related note, UPI transactions are immensely popular in India and people have started preferring them over cash payments. Right from a vegetable vendor to a small business owner, almost everyone has started accepting payments via UPI. In April this year, Finance Minister Nirmala Sitharaman revealed that the Unified Payments Interface (UPI) has seen an unprecedented volume of transactions in the fiscal year 2024. The platform recorded around 131 billion transactions, with a total value of Rs 200 trillion.