RBI Launches AI-Powered "Conversational Payments" for UPI Transactions

RBI Launches AI-Powered "Conversational Payments" for UPI Transactions

The Reserve Bank Of India has proposed an increment in the payment limit of UPI Lite for every transaction from ₹200 to ₹500 enabling offline functionality alongside. The significant pivotal step is estimated to restructure India's economic trajectory.

“With the objective of harnessing new technologies for enhancing the digital payments experience for users, it is proposed to (i) enable “Conversational Payments" on UPI, which will enable users to engage in conversation with AI-powered systems to make payments; (ii) introduce offline payments on UPI using Near Field Communication (NFC) technology through ‘UPI-Lite’ on-device wallet; and (iii) enhance the transaction limit for small value digital payments in off-line mode from ₹200 to ₹500 within the overall limit of ₹2000 per payment instrument. These initiatives will further deepen the reach and use of digital payments in the country," Shaktikanta Das, RBI Governor said.

Conversational payments via UPI implementation are an important concept and will allow users to initiate and authorise transactions with help of natural language interaction, enabling easy procedure to make payment more convenient.

The new norm revoked the requirement of two-factor authentication during making small value everyday payments, transit payments and others, facilitating contactless, faster, and reliable mode of transaction.

“Since then, there have been demands for enhancing these limits. To encourage wider adoption of this mode of payments and bring in more use cases into this mode, it is now proposed to increase the per transaction limit to ₹500,” added RBI Governor Mr. Das.

“As Artificial Intelligence (AI) is becoming increasingly integrated into the digital economy, conversational instructions hold immense potential in enhancing ease of use, and consequently reach, of the UPI system. It is, therefore, proposed to launch an innovative payment mode viz., “Conversational Payments” on UPI, that will enable users to engage in a conversation with an AI-powered system to initiate and complete transactions in a safe and secure environment,” as stated in RBI statement.

“UPI, with its ease of usage, safety and security, and real-time feature, has transformed the digital payment ecosystem in India. Addition of many new features over time have enabled UPI to facilitate diverse payment needs of the economy,” said RBI.

The new mechanism is made available for smart and feature phones and currently work in English and Hindi languages, which is likely to be extended in more languages soon.

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