UPI Circle: New Feature in UPI Payments Introduced

The National Payments Corporation of India (NPCI) has recently introduced the ‘UPI Circle’ feature. This novel functionality aims to enhance the UPI ecosystem by enabling users to delegate payment permissions to trusted individuals. Key Players of UPI Apps like PhonePe, BHIM and other apps are gradually implementing this feature.

This UPI Circle feature in payments, promotes more inclusivity into UPI Payments. The persons don’t have bank accounts in family, could now make UPI payments. It enables transfer of financial authority to trusted persons.

“UPI Circle on BHIM is more than just a feature; it’s a step towards a more inclusive and connected financial ecosystem. By offering a secure and flexible way to delegate financial responsibilities, UPI Circle enhances the way we share and manage our money and supports a more interconnected society,” said Lalitha Nataraj, managing director and CEO, NBSL.

In a scenario where UPI Circle is used, An account holder might want to authorize someone else to handle payments.

Key aspects of UPI Circle:

There are Primary User and Secondary User in this payment process. The main account holder who grants the payment authorization is Primary User. The person who is authorized to make payments from the primary user’s account is the Secondary User.

Delegation of Authority:The primary user can choose between:
Full Delegation: The secondary user can make payments up to a specified limit without requiring further approval for each transaction.
Partial Delegation: The secondary user can initiate a payment request, but the primary user must approve each transaction by entering their UPI PIN.

So there are two types of payments in the UPI Circle, one is full and complete payment permission with spend limit. The second type of payment is with partial permission payments which requires approval for every payment of secondary user.

The usecases for UPI circle includes a child done a payment and parent give approval in upi app, an employee can make payment for business needs with Business owner as primary user.