KKN Gurugram Desk | India’s rapidly growing digital payments ecosystem just got more inclusive. PhonePe, one of India’s largest UPI-based digital payments platforms, has launched a new feature called “UPI Circle” — an innovation aimed at simplifying and personalizing group-based financial transactions.
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This new update empowers users to create private groups within the PhonePe app to send or receive money effortlessly. The idea is simple but powerful: make digital payments more accessible to individuals who may not have direct access to UPI-linked bank accounts, while offering primary users full control over group transactions.
What Is UPI Circle? An Overview
The UPI Circle feature is essentially a closed payment group, where a primary user manages payments on behalf of others. You can create a UPI Circle, add trusted members such as family or close friends, and oversee the flow of money within that group.
Key Highlights:
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Primary users can approve or reject payment requests made by others in the group.
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Members without UPI-linked bank accounts can still transact digitally.
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Users can track group payment history and manage spending.
“This is a leap forward in making digital finance more accessible, especially for users with limited banking access,” says Sonika Chandra, Chief Business Officer – Consumer Payments, PhonePe.
Why It Matters: Solving Real-World Payment Problems
India is home to over 1.4 billion people, yet a significant population remains outside the formal banking system. This feature is especially useful for:
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Elderly users, who may not operate their own digital wallets.
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Children and students, whose spending is managed by guardians.
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Domestic workers or staff, who receive household payments.
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Joint household or trip expenses, where one person manages funds.
The UPI Circle thus becomes a financial bridge between the tech-savvy and those still learning digital finance.
How Does PhonePe UPI Circle Work?
Group Creation:
Users can create a UPI Circle via the PhonePe app by navigating to the ‘My Circles’ section. Once a Circle is created, they can add members manually by sending invites.
Primary User Responsibilities:
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Acts as the approver for all payment requests.
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Can initiate transactions on behalf of other members.
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Has access to the entire payment history.
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Can remove users, set spending limits, or deactivate the Circle.
Secondary Members:
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Can request payments using their own UPI ID.
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Don’t need a bank account linked to UPI.
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Rely on the primary user’s bank account for transaction processing.
This structure enables those without full banking functionality to participate in cashless, secure, digital transactions.
Security and Privacy Measures
PhonePe has implemented multiple layers of security and authorization to protect user data and prevent misuse.
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Multi-Factor Authentication before adding members.
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Real-time notifications for all group activity.
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Transaction limits and alerts for spending control.
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End-to-end encryption for all UPI Circle-related communication.
The platform ensures that the primary user remains in complete control, preventing unauthorized access or financial abuse.
PhonePe’s Strategic Move Toward Financial Inclusion
PhonePe’s UPI Circle is a strategic product in line with India’s vision for financial inclusion and digital literacy.
“There’s a huge segment of users who are willing to adopt digital payments but lack the infrastructure — like bank accounts or smartphones. UPI Circle lowers that barrier,” explains Sameer Nigam, CEO and Co-founder of PhonePe.
By empowering a single user to manage multiple users’ payments, PhonePe is targeting both rural penetration and family-based digital finance models.
Competition and Market Landscape
UPI Circle is PhonePe’s direct answer to growing competition in the Indian digital payment market.
According to industry reports, NPCI (National Payments Corporation of India) had proposed this group-based payment framework as early as 2024. Following this:
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Amazon Pay, Google Pay, and BHIM reportedly started testing similar features in September 2024.
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However, PhonePe is the first to publicly roll out this feature at scale.
The company’s aggressive product innovation is especially relevant as it prepares for its anticipated stock market listing.
PhonePe IPO Watch: Walmart-Backed Unicorn Eyes Public Markets
The Economic Times recently reported that PhonePe is preparing for its IPO, backed by global retail giant Walmart. While an exact date is yet to be confirmed, regulatory requirements — especially those from NPCI regarding UPI market share caps — are cited as one reason for the delay.
Currently, NPCI guidelines suggest that no single UPI app can command more than a 30% market share to maintain a healthy competitive landscape. PhonePe, which leads the market alongside Google Pay, must carefully navigate this framework as it scales further.
User Reactions and Social Media Buzz
The UPI Circle feature has been met with widespread curiosity and positive feedback across social media platforms. Twitter/X and LinkedIn saw numerous posts praising PhonePe for:
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Catering to underbanked families.
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Offering a smart solution for managing shared expenses.
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Making group financial planning easier.
A user tweeted:
“Finally! I can now pay my house help digitally even though she doesn’t have a UPI account. Game changer by PhonePe.”
Future Possibilities and Integrations
With the success of UPI Circle, PhonePe is expected to:
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Roll out Circle-based merchant payments.
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Integrate with e-commerce platforms for shared cart checkouts.
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Provide custom dashboards for families and group managers.
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Offer credit-based features for verified Circle users.
Such features could reshape how group finance is handled in India, especially in schools, housing societies, and small businesses.
With the launch of UPI Circle, PhonePe has added another feather in its cap as a pioneer in digital payment solutions. By enabling controlled, secure, and inclusive group transactions, it opens the door for millions of Indians to participate in digital finance, even if they lack a traditional bank account.
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