By Mr. Abhay Ray 
Introduction
PhonePe launched UPI Circle on its app on April 15, 2025. UPI Circle allows users to create a sort of loop i.e. circle and make payments on behalf of their family, friends or trusted contacts i.e. delegated payments. UPI Circle enables dependents to generate their own UPI ID without needing a linked bank account. This enables secure online payment solutions for those with limited access to digital financial services
What is UPI Circle?
Under the Circle feature, a primary user can allow a secondary user to make payments from his UPI account. The primary user delegates the UPI authentication rights to the secondary user, allowing the secondary user to make transactions with the permission of the primary user. The primary user can add his family members or a trusted person (secondary user) to his Circle via UPI ID or QR code and can easily approve payments for them from anywhere.
UPI Circle, developed by the National Payments Corporation of India (NPCI), is designed with the aim of increasing the use of Unified Payments Interface (UPI) and facilitating supervised spending.
Here’s How It Works On PhonePe
According to the press release dated April 15, 2025, with UPI Circle on PhonePe, a UPI account holder (primary user), can add their family/trusted individuals (secondary user) to their circle using UPI ID or QR code and seamlessly authorize payments for them from anywhere. The primary user retains complete control over the usage, including the ability to review payment requests, track secondary user expenses, get secure access to detailed payment records within each circle and delink access from their UPI Circle, as needed.
Here’s a step by step guide on how to use UPI Circle on PhonePe
Step 1: Open the PhonePe app. On the home screen, users will get the option to enable UPI Circle
Step 2: To set up UPI Circle and link secondary users, tap ‘Invite Secondary Contact’ by either scanning their QR code or manually entering the UPI ID
Step 3: Secondary users must join the UPI Circle by accepting the invite received on their PhonePe app.
Step 4: Once added to the UPI Circle, secondary users can select the primary user’s account as a payment option to start making payments.
Primary user will get double control
The primary user can control the use of UPI Circle feature on PhonePe in two ways. When Partial Delegation mode is selected, every time the secondary user initiates a transaction, the primary user will get a notification to approve it. On the other hand, in Full Delegation mode, the primary user can set a monthly spending maximum limit for the secondary user. In this mode, manual approval is not required for every transaction.
The primary user can set a maximum limit of up to ₹15,000 per month, and the maximum limit for each transaction is kept at ₹5,000.
A step towards inclusive banking
Sonika Chandra, Chief Business Officer, Consumer Payments, PhonePe said, “UPI Circle is a significant step forward in extending the ease and convenience of digital payments for those who are underbanked and those new to the ecosystem. This can be a parent providing expenses to their college kids, authorizing payments on behalf of older parents who may be wary of digital payments or busy individuals who want to delegate household chores. Integrating UPI Circle into the PhonePe app, aligns perfectly with our vision of democratizing digital payments and making financial services accessible toall. This innovative addition to the UPI stack offering simplifies shared expenses and empowers users to create trusted payment circles that streamline their financial interactions.”
Why UPI Circle Matters
This development is expected to revolutionize how digital payments are made in India, especially for users in rural areas or unbanked populations, where access to traditional banking services remains a challenge. With the rise of smartphones and increasing internet penetration, UPI Circle could drastically expand the number of people using digital payment systems.Additionally, for those concerned about privacy or security, UPI Circle provides an extra layer of protection. Since transactions are not directly tied to a bank account, users can feel more comfortable making transactions without exposing their financial details.
Conclusion
PhonePe’s UPI Circle is a transformative step toward simplifying digital payments and promoting financial inclusion. By allowing users to make UPI payments without the need for a bank account, it breaks down barriers for millions of unbanked and underbanked individuals, particularly in rural areas. This feature not only makes transactions faster and more secure but also paves the way for a more inclusive digital economy. As India continues to embrace cashless payments, UPI Circle could play a pivotal role in making digital transactions accessible to all, regardless of banking status. It’s a bold move that could redefine how we think about money, payments, and financial participation in the future.
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