The Reserve Bank of India (RBI) introduced UPI Lite (Unified Payments Interface) in September 2022 to streamline small-value payments. Many experts suggest that it was an important and much-needed step taken by the apex bank to ensure that small-value UPI transactions are convenient and reliable for both payees and receivers, and also reduce instances of payment failures.
If you’re unsure what UPI Lite is, how it works, or its features, then this guide is for you. Read on!
What is UPI Lite?
UPI Lite is essentially an online wallet within the UPI applications that allows you to do online transactions without using the UPI PIN. It allows you to do only small-value payments of up to Rs. 1,000 per transaction with a daily limit of up to Rs. 4,000.
The UPI Lite was introduced by NPCI (National Payments Corporation of India), and it is available in various UPI apps like BHIM (Bharat Interface for Money), PhonePe, and Google Pay.
Features of UPI Lite
Now that you know what is UPI Lite, it would help to know more about its amazing features for users, including:
- No UPI Pin
Typically, when you use your UPI app to make payments, you will be prompted to enter your PIN to complete the transaction. However, with UPI Lite, you don’t need to use a PIN to make small-value payments, allowing you to complete the transaction faster.
- No additional fees and KYC
You need not worry about paying any additional fees for using UPI Lite to make payments or transfer funds. Additionally, you do not need to complete any Know Your Customer (KYC) process to use the UPI Lite feature.
- Offline mode
One of the most significant UPI Lite features is that you can use it to make payments offline, i.e., even without an internet connection. UPI Lite utilizes NFC technology for communication during offline transactions. However, currently, there is a UPI Lite transaction limit; it allows only 10 offline credit transactions and one debit transaction per day.
- Refunds
If you use the UPI Lite payment gateway for small transactions and suddenly lose your mobile phone with an active UPI Lite account balance, you can request a refund from the bank, and you can get your full refund back.
How does UPI Lite work?
If you are new to using an online payment gateway and are not sure how UPI Lite works, then you must know that its working is quite simple.
- Registration
As a new user, you must download a UPI app like Google Pay or BHIM on your mobile phone and link it to your bank account to activate the UPI Lite feature. If you are an existing UPI app user, you can directly start using the Lite feature simply by adding funds in it.
- Add funds
Once you download the UPI app and link it to your bank account, you must add the desired amount from the bank account to the UPI Lite wallet.
- Make payments
After adding the funds, the process is complete, you can start making UPI Lite payments without having to use the UPI PIN. You can make payments through different methods like UPI-powered QR codes or by entering the recipient’s phone number.
Benefits of UPI Lite
UPI Lite offers several benefits, including:
1. With UPI Lite, you can make quick payments for your small purchases without the need to enter your UPI PIN.
2. One of the primary concerns people have about online payment gateways is the security of the transaction. But you can be assured that the UPI Lite transactions are completely safe, and payments up to Rs. 1,000 are processed efficiently and reliably.
3. Although there is a UPI Lite payment limitof Rs. 1,000 per transaction, you can do multiple transactions in a day with a maximum cap of Rs. 4,000. Thus, it allows you to be organised with all your online transactions and keep a track of the payment history.
4. Another significant benefit of the UPI Lite feature in the UPI apps is its versatility. It not only allows you to make payments in offline mode, but also allows you to transfer funds through the UPI QR codes, UPI IDs, and receiver’s phone number and bank account details.
UPI vs UPI Lite – knowing the differences
| UPI | UPI Lite |
| It is a real-time payment system that enables you to transfer money from your account to the recipient’s account using your mobile phone. | It is a simplified version of UPI that is specifically designed with basic features, allowing users to do small transactions easily and efficiently. |
| It offers a wide range of functionalities, like peer-to-peer money transfer, bill payments, mobile recharges, online shopping, etc. | It has limited functionalities; you can make peer-to-peer fund transfers and make payments for small purchases. |
| The UPI app generally uses more internet data due to the inclusion of several functionalities and features. | UPI Lite is designed to consume less internet data, making it suitable for users with limited storage and internet access. |
Conclusion
UPI Lite is a simplified version of the UPI system, allowing you to make small payments for everyday purchases easily and efficiently. It seamlessly integrates with your existing UPI app, allowing you to make payments of up to Rs. 1,000 in a single transaction without having to enter the UPI PIN.
You can easily top up your UPI Lite wallet balance from your linked bank account and enjoy a faster and convenient payment experience.
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