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RBI introduces UPI Lite for faster real-time, low-value transactions. Check more details here

RBI introduces UPI Lite for faster real-time, low-value transactions. Check more details here

UPI Lite has been launched as an on-device wallet feature that will allow users to make real-time small-value payments of up to Rs 200 without using a UPI PIN. At present, users need to enter the PIN on UPI apps, such as Google Pay, Phonepe, and Paytm.

UPI Lite was launched on September 20 by RBI Governor Shaktikanta Das. Users can transfer money using UPI Lite without using a UPI PIN and internet. Image: Pragati Srivastava UPI Lite was launched on September 20 by RBI Governor Shaktikanta Das. Users can transfer money using UPI Lite without using a UPI PIN and internet. Image: Pragati Srivastava

In a bid to adopt an easier payment interface in the country, the Reserve Bank of India (RBI) has recently floated Unified Payments Interface (UPI) Lite. The new interface is expected to be a faster, more convenient solution for simpler low-value transactions. The biggest draw of the interface is that users can make small-value transactions in a near-offline mode, without using the internet. 

The interface was launched on September 20 by RBI Governor Shaktikanta Das. Users can transfer money using UPI Lite without using a UPI PIN. At present while using UPI apps, such as GooglePay, Phonepe, Paytm, users need to enter their UPI PIN.  

Basic features 

With UPI Lite, feature phone users can transfer money and access UPI networks. They can make payments in the digital mode just the way smartphone users transfer money straight from their bank accounts. 

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But the method will need the internet partially. Customers will first have to add funds from their bank accounts to the app (using internet connectivity) by authentication or through UPI AutoPay. Users need to register themselves online using the Additional Factor Authentication (AFA) for every subscription payment. 

How will it work?  

It is to be noted here that the UPI Lite balance shown in the app is only the virtual balance.  

In simple terms, UPI Lite transactions will not be displayed in your bank account statement or passbook. After a user adds the funds online, he can access UPI Lite offline and transactions can be carried out. No separate authorisation or UPI PIN is required for the transaction then. 

Besides, the wallet will not show the balance update. The National Payment Corporation of India (NPCI) will send a summary of daily transactions via SMS. Only top-up amounts will be visible on the wallet.  

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The issuing bank will deal with disputes regarding fund transfer, enablement, top-ups or disablement of UPI Lite, as per the NPCI website.  

In case a user disables UPI Lite, the unutilised balance will be credited to his bank account, according to the NPCI website. 

Do you need internet? 

In phase 1 of its rollout, UPI Lite will process transactions in near offline mode. That means, debit payments can be made without the internet, whereas credits can be done only online. 

However, in the next phase, NPCI is planning to launch the total offline mode, where customers can process transactions — both debit and credit — in complete offline mode.  

Transaction limit on UPI Lite 

The upper limit for a UPI Lite transaction has been set at Rs 200 as the interface is aimed for small-value transfers. Therefore, for these transactions, users won't need a UPI PIN, as per the NPCI website. The total limit of UPI Lite for an on-device wallet is set at Rs 2,000 at any point in time.  

Who can use it? 

UPI Lite feature is available on the BHIM app now, as per NPCI. At present, 8 banks have the UPI Lite feature on their platforms. These are Canara Bank, HDFC Bank, Indian Bank, Kotak Mahindra Bank, Punjab National Bank, State Bank of India, Union Bank of India, and Utkarsh Small Finance Bank.

Also read: Even as UPI grows rapidly, a majority of customers prefer cash-on-delivery for e-commerce purchases

According to NPCI, UPI Lite can help banks reduce their debit load on the core banking system. This would improve the success rate of transactions in the future, reduce footfalls, and enhance user experience. Lastly, the interface would be the next step in a billion transactions a day on the UPI platform, which is the next target.