Context:
UPI Circle is a new BHIM UPI feature where a primary user can authorize a secondary user to make payments directly from the former’s bank account. This adds more convenience in managing finances for families, especially for elder family members, while still having control and security over the transactions.
Key Features of UPI Circle
- Delegation of Payments
- This means that the primary user can allow up to five secondary users to perform transactions using their account. The secondary user, on the other hand can accept only one delegation from a primary user at a time.
Transaction Limits
- Full Delegation
- Primary users can make payments on their behalf for up to ₹15,000 in a month. That is, they can use up to ₹5,000 per transaction.
- Partial Delegation
- The secondary user would need to approve every transaction with the primary user. There is no fixed cap on transactions, however, any UPI limits available to the primary user remain.
- Control and Transparency
- With each transaction, there will be instant SMS notifications for the primary user.
- Authorizations can be cancelled at will by primary users.
How UPI Circle Works?
- Registration and Setup
- Download BHIM UPI and link your bank account.
- Select the UPICircle option.
- Add secondary users by entering their phone numbers or UPI IDs.
- Set the delegation type (partial or full) and define transaction limits.
- Usage:
- Secondary users can make payments directly from the primary user’s account within the set limits.
- Notifications ensure transparency and allow the primary user to monitor transactions.
Benefits and Use Cases
- Convenience for Families
- Senior citizens can delegate payments to family members without worrying about complex interfaces or errors.
- Parents can give permission to the children to make required payments at travel, food, or stationery while maintaining control over spending.
- Simplified Transactions:
- Transfers between accounts are not required, thus making it much easier for financial management.
- The hassle of account statements is reduced since it directly debits the account of the primary user.
- Security
- Risk of financial loss through monthly transaction limits.
- Security can be maximized by taking back the authorization capability. As of now
Source: Mint
