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To make payments using UPI, users typically need to link a Bank account to their unique UPI ID on their mobile device.
However, in August 2024, the National Payments Corporation of India (NPCI) introduced a new feature called ‘UPI Circle,’ which allows the delegation of authority for a single UPI ID. With UPI Circle, multiple individuals can now access and use the same UPI ID. Read the blog below to explore the NPCI’s requirements and learn how UPI Circle works.
UPI Circle is a new feature introduced by NPCI that allows multiple individuals to share a single UPI ID. In this system, the primary user, typically the account holder, can grant access to a trusted secondary user, such as a family member, friend, or spouse. Both users can then use the shared bank account and UPI ID for transactions. The primary user can set predefined access limits for the secondary user. For added security, UPI Circle provides the primary user with complete control to grant or revoke permissions as needed, ensuring secure and flexible management.
UPI Circle was introduced with the following benefits in mind:
UPI Circle allows primary users to link their UPI accounts with secondary users, allowing them to make payments on their behalf. The platform offers two forms of delegation:
Full Delegation: The primary user grants the secondary user permission to initiate and execute transactions without further approval, provided the transactions stay within predefined spending limits. This makes it easier for the secondary user to carry out day-to-day payments independently.
Partial Delegation: In this model, the secondary user can initiate payments, but the primary user must review and approve the transaction by entering their UPI PIN. This setup provides tighter control over significant payments while allowing flexibility in smaller transactions.
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To link a UPI ID with secondary users, follow these steps:
Remember that the contact must be chosen from the primary user’s saved contacts for security reasons. Manually entering contact details is not allowed. The precise steps will become clearer once the feature is officially launched.
Once a UPI Circle is set up and the secondary user has accepted it, transferring funds is straightforward. Here’s how secondary users can make transactions:
Following these steps, you can efficiently transfer funds using UPI Circle, ensuring transactions are secure and managed according to the delegation settings.
The UPI Circle feature is designed to assist individuals who may not have the means or desire to manage their digital transactions but still want to access financial services. It offers a seamless and inclusive way for various groups to benefit from digital payments:
While this new feature proves to be beneficial for a lot of age groups, it has its own set of benefits and drawbacks, such as:
Advantages of UPI Circle | Disadvantages of UPI Circle |
---|---|
Allows users to easily split bills, making it perfect for group activities like dining out, trips, or shared household expenses. | Requires users to be comfortable with smartphones and digital payment interfaces. Individuals who are not tech-savvy or need more digital literacy may find it challenging to use the app effectively. |
All transactions are processed in real-time, ensuring that payments are instant, reducing delays and providing immediate confirmation of who has paid. | It operates within the UPI ecosystem, meaning users outside India or those unfamiliar with UPI might find it inaccessible. It limits functionality to users who have UPI-enabled bank accounts and apps, reducing its global appeal. |
Tracks everyone’s contributions and sets recurring payments for ongoing expenses, like rent or subscriptions, making financial management easy. | Users may need to share personal details such as contact numbers, bank information, and payment histories. This could raise privacy and data security concerns, especially in groups with loose connections. |
Each circle member can view what has been paid and what remains outstanding, minimising misunderstandings and ensuring all expenses are settled fairly. | UPI transactions depend on stable internet connections. If a user’s mobile network or the |
Eliminates the need for multiple individual transactions. One member can pay the entire bill upfront; others can simply transfer their share through the circle. | Works smoothly when all group members actively participate and pay on time. If one or more members delay their payments, it can disrupt the group's financial management, causing frustration and financial strain on others. |
To ensure the security of UPI Circle and its users, NPCI has established the following protocols:
The concept of UPI Circles is a group payment feature offered by certain UPI apps like Google Pay (GPay), PhonePe, and Paytm. It allows users to create groups with friends, family, or colleagues, making it easier to split bills, manage group expenses, and track payments. Below is a breakdown of how this feature works on these platforms:
Feature Name: Google Pay Groups
Functionality: GPay allows you to create groups for easy splitting of expenses. Once you create a group, members can add their expenses to the group, and the app will automatically calculate the amount each person owes. The group members can pay each other directly within the app.
Key Features:
Usage Example: When a group of friends goes out to dinner, one person can pay the bill and use GPay to split the expense among everyone, tracking who has paid and who hasn't.
Feature Name: PhonePe Groups
Functionality: Similar to GPay, PhonePe offers a group payment feature where users can create a group, track shared expenses, and settle balances. PhonePe simplifies the process of requesting and making payments within the group.
Key Features:
Usage Example: If you're on a trip with a group of friends, one person can add all shared expenses, and the app will split the cost equally or based on custom amounts. Members can then settle the amounts via UPI.
Feature Name: Paytm Groups
Functionality: Paytm also allows users to create groups and manage expenses collectively. The Paytm Group feature tracks shared payments, making it easier to Handle group activities like trips or parties where multiple people contribute.
Key Features:
Usage Example: For a family trip, Paytm Group can be used to track shared expenses like transportation and meals. It shows who owes what, and group members can settle their dues within the app.
Each app’s UPI Circle feature serves the same core function but with slight variations in interface and additional services. The choice largely depends on your existing usage and preference for a particular platform.
Here are some guidelines issued by the NPCI for UPI companies:
UPI Circle is an innovative solution that enhances the convenience and security of peer-to-peer transactions in a world rapidly shifting towards digital payments. UPI Circle simplifies payments and empowers users to control their financial interactions seamlessly by fostering trust through its closed-loop system. Its impact, especially on younger generations, is poised to be significant, potentially reducing reliance on traditional debit cards and streamlining financial management. As India continues to lead in the digital payments revolution, UPI Circle represents the next step in making secure, social, and swift payments a reality for everyone.
A: To use UPI Circle, the primary user must scan a QR code or enter the secondary user's UPI ID. Then, select the desired contact from their contact list and provide access to a trusted secondary user.
A: According to NPCI guidelines, secondary users have a maximum monthly limit of Rs. 15,000 and per transaction limit of Rs. 5,000.
A: The primary user can delegate full or partial access to the secondary user to manage UPI transactions.
A: To ensure security and limit misuse, NPCI restricts the manual entry of mobile numbers. You must select the contact from your list, ensuring it is someone you trust.
A: No, you do not need to submit any new documents. Since your UPI is already linked with your Aadhaar and PAN Card, no additional paperwork is required to add someone to your UPI Circle.
A: No, you do not need an additional app. You can use the same UPI app to perform transactions through UPI Circle.
A: A primary user can add up to 5 secondary users to their UPI Circle. However, each secondary user can only accept delegation from one primary user. A primary user can create up to 5 UPI Circles using the same Savings Account.
A: Yes, you can view the secondary user's transactions through UPI Circle in the UPI app and the bank Account Statement.