The National Payments Corporation of India (NPCI) has announced that starting February 1, 2025, Unified Payments Interface (UPI) users will no longer be able to use special characters in their UPI identities.
This move aims to standardize the UPI ID generation process, ensuring a more streamlined and uniform experience across the digital payments ecosystem.
In a circular issued on January 9, 2025, NPCI stated that any transaction with a UPI ID containing special characters would be declined by the central system.
The directive was first introduced in March 2024, advising all UPI ecosystem participants to use only alphanumeric characters for generating UPI transaction IDs.
Despite efforts to improve compliance, some entities have remained non-compliant, prompting NPCI to enforce stricter measures.
“We have been working with the ecosystem to improve compliance. Though the issue has been largely resolved, it is observed that a few participants continue to be non-compliant,” the circular mentioned.
UPI applications have been instructed to ensure compliance with this rule to prevent any disruption in transactions.
UPI Transactions Continue to Surge
This regulatory change comes as UPI transactions continue to dominate the digital payments landscape in India.
According to recent data, total UPI transactions surged by nearly 46% in 2024, reaching a record 17,220 crore from 11,768 crore in 2023.
Similarly, the total value of UPI transactions soared over 35% to INR 246.82 lakh crore in 2024 from INR 182.84 lakh crore in 2023.
A report by the Reserve Bank of India (RBI) further highlighted that UPI accounted for more than 85% of digital payments in terms of volume in 2024.
Out of 20,787 crore digital payments recorded during the year, 17,221 crore transactions were facilitated via UPI.
Enhancements to UPI Lite
In an additional development, the RBI increased the transaction limit of the UPI Lite Wallet from INR 2,000 to INR 5,000 in 2024.
The offline transaction limit for UPI Lite service was also raised from INR 500 to INR 1,000 per transaction, further enhancing convenience for users.
The NPCI’s latest directive on special characters in UPI IDs is expected to reinforce security, improve processing efficiency, and contribute to the seamless expansion of India’s digital payment infrastructure.
