Exciting UPI Features of 2025: What's New and Who Will Benefit?

As of January 1, 2025, UPI has undergone a major transformation, thanks to the Reserve Bank of India’s (RBI) latest changes. Here’s a quick look at what’s new in UPI.

Rs 10,000 transaction limit on UPI 123Pay

The transaction limit for UPI 123Pay has been doubled to Rs 10,000, making it much easier to carry out bigger transactions directly from your UPI-linked bank account. This is especially beneficial for users who need to make higher-value payments like bills, shopping, or even small business transactions without the need for cash or multiple steps.

KYC compliance for digital wallets

To ensure safety and streamline digital payments, apps like Paytm, PhonePe, and UPI wallets are now required to be KYC-compliant and linked to your app for smooth functionality. This will ensure that your digital wallet is secure and properly verified, reducing the chances of fraud.

Added OTP for extra security

Security is now tighter than ever with the mandatory introduction of One-Time Passwords (OTPs) for UPI transactions. This added layer of security ensures that your funds are safe, especially with the rise in digital transactions. Whether you're making a Rs 500 or Rs 10,000 payment, you’ll need the OTP for a smooth and secure transaction.

UPI 123Pay works without internet

One of the most anticipated features of UPI 2025 is the ability to make transactions via UPI 123Pay without needing a constant internet connection. This is particularly good for users in rural and remote areas, where network connectivity can often be unreliable. People in such areas can now make secure payments using just a basic phone.

A variety of payment methods

UPI’s flexibility has grown in 2025. Now, UPI 123Pay supports multiple payment methods, including IVR (interactive voice response), missed calls, and even sound-based technology. This broadens accessibility, especially for users with limited access to smartphones or advanced technology.

Following the RBI's decision to raise the UPI transaction limit for taxpayers to Rs 5 lakh in 2024, the updated UPI system now supports even more high-value transactions. From medical expenses to large education fees, UPI is becoming the preferred mode of payment for high-stake transactions, giving users greater flexibility and ease.

Major banks like ICICI, HDFC, and Axis Bank, along with popular payment apps like Google Pay, PhonePe, and Paytm, are also adjusting their systems to support these new rules.