In September 2022, the Reserve Bank of India (RBI) introduced UPI Lite to streamline small-value payments. This was done to ensure reliable and convenient small UPI transactions, thus minimising payment failures. UPI Lite is designed to simplify regular transactions for low-value shopping, such as groceries or inexpensive single items.
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What is UPI Lite?
UPI Lite is an online wallet within UPI apps introduced by NPCI that allows you to transact money without using your UPI PIN. It permits only small-value payments of up to ₹1000 per transaction and has a daily limit of ₹4,000. This UPI Lite feature is available in various Unified Payments Interface apps like Google Pay, PhonePe and BHIM.
Related Read: How to Change UPI ID in Google Pay?
UPI Lite Limit
Using UPI Lite, you can only transact ₹1000 INR per transaction. In a day, you can add up to ₹4,000 INR to make multiple payments. Additionally, the UPI Lite wallet can only hold a maximum amount of ₹5,000 INR at a time.
UPI Lite X
UPI Lite X is an innovative extension of UPI Lite, launched in September 2023, designed to facilitate offline transactions without requiring internet connectivity. By leveraging Near Field Communication (NFC) technology, UPI Lite X enables seamless money transfers between on-device wallets, offering a unique and efficient solution for quick payments in various scenarios.
UPI Lite X Limit
The maximum limit for a UPI Lite X transaction is ₹1000, while the total UPI Lite X balance cannot exceed ₹2,000 at any given time. The total number of transactions is limited to one debit and 10 credit offline transactions. These limits may be adjusted periodically as determined by NPCI.
What are the Features of UPI Lite?
UPI Lite has a several features including:
1. No UPI PINs
Users are not required to use their UPI PINs to make the small value transactions.
2. No Fees
UPI Lite is not charging any fees for transfering the funds.
3. No KYC Requirements
Users are not required to do their KYC verifications.
4. Offline Mode
UPI Lite X allows users to make payments offline, without an internet connection. NFC technology is used for communication in these offline transactions. It currently has limitations, allowing only 10 credit transactions and 1 debit transaction per day.
5. Record Transactions
UPI Lite transactions are recorded only within the app, not on bank statements.
6. Refunds
If a user loses their mobile phone with an active UPI Lite account balance, they can request a refund from their bank.
Read More About: UPI Transaction Charges: Limits Per Day & Guidelines
How Does UPI Lite Work?
1. Registration
If you’re a new user, you need to download a selected app like Google Pay or BHIM and link your bank account to activate the UPI Lite feature. Existing users of these apps can directly start using it by adding funds.
2. Adding Funds
User can add the money from their linked bank account to UPI Lite wallet.
3. Making Payments
Once the fund is added, users can start making small transactions of ₹1000 per transaction without using their UPI PIN. They can transact the amount using various methods like UPI-powered QR codes or by entering the recipient’s phone number.
Read More About: What is a Payment Gateway and How Does it Work?
Benefits of UPI Lite
1. Hassle-free small-value payment gateway
With UPI Lite, you can make quick payments for small-ticket items without the need for a UPI PIN.
2. Reliable transactions
Despite peak loads on the UPI infrastructure, UPI Lite ensures that transactions below Rs. 1000 are processed efficiently and reliably.
3. Versatility
UPI Lite allows you to scan and pay using UPI QR codes or transfer funds via VPAs, UPI IDs, phone numbers and bank accounts.
4. Organised transactions
All your transactions made through UPI Lite are organised within the app, making it easier for you to track your payment history. This also reduces the mess on bank passbooks.
The convenience of UPI Lite makes it an ideal solution for businesses that deal with frequent small-value transactions. Whether you run a retail store or provide services like food delivery / transportation, accepting UPI payments through UPI Lite can streamline your payment process and enhance customer satisfaction.
Difference Between UPI and UPI Lite
Parameter |
UPI |
UPI Lite |
| Definition | UPI is a real-time payment system that allows you to transfer money between bank accounts using your mobile phone. | UPI Lite refers to a simplified version of UPI designed for users with basic or feature phones and limited internet connectivity. It aims to provide essential UPI functionality on devices with lower specifications. |
| Functionality | It offers a wide range of use cases, including peer-to-peer (P2P) money transfers, bill payments, mobile recharges, online shopping, and more. | It typically provides basic P2P money transfer functionality and balance inquiry. It may not support advanced features like bill payments or shopping. |
| App Size and Data Consumption | UPI apps are generally larger and may consume more data due to the inclusion of various features and functionalities. | UPI Lite apps are designed to be smaller in size and consume less data, making them suitable for users with limited storage and internet access. |
| User Interface | UPI apps often have a more feature-rich and user-friendly interface with a wide range of options and settings. | UPI Lite apps have a simpler and more minimalist interface, focusing on essential functions and ease of use. |
| Device Compatibility | UPI apps are typically designed for smartphones with modern operating systems (Android and iOS). | UPI Lite is intended for use on basic or feature phones that may not have advanced operating systems. It may rely on USSD (Unstructured Supplementary Service Data) technology for communication. |
| Customisation and Settings | UPI apps offer more customisation options and settings for users to personalise their experience. | UPI Lite apps have fewer customisation options and settings due to their simplified nature. |
| Updates and Features | UPI apps receive regular updates and often introduce new features and improvements. | UPI Lite apps may receive fewer updates and may focus on maintaining core functionality rather than adding new features. |
| Target Audience | It is designed for a broad range of users, including those with smartphones and access to high-speed internet. | It primarily targets users with basic phones and limited internet access, such as those in rural areas or with low-end devices. |
Conclusion
UPI Lite is a simplified version of the Unified Payments Interface (UPI) system, making small, everyday payments in India a breeze. It integrates seamlessly with your existing UPI app, allowing you to pay up to ₹1000 without needing your UPI PIN for every transaction. Simply top up your UPI Lite balance from your linked bank account and experience faster, more convenient digital payments!
Frequently Asked Questions (FAQs)
1. Is UPI Lite safe or not?
UPI Lite is designed with security measures to ensure safe transactions, but its security may be limited compared to the full UPI system due to the constraints of basic phones and connectivity options.
2. What is the maximum limit in UPI Lite?
The current UPI Lite transaction limit is ₹4,000 per day. However, according to a recent press release by the Reserve Bank of India (RBI), the UPI Lite wallet limit will increase from ₹2,000 to ₹5,000. Additionally, on October 9, 2024, RBI has proposed raising the maximum transaction limit for UPI Lite from ₹500 to ₹1,000.
3. How do I transfer money back from UPI Lite?
To transfer money back from UPI Lite, you typically follow the same process as sending money, entering the recipient’s details and the amount, but in this case, you would send it to your bank account or UPI ID.
4. Can UPI Lite be used offline?
No, UPI Lite typically relies on basic phone connectivity, such as USSD, and requires a network connection for transactions. Hence, it cannot be used without a network connection. It might work without an internet connection though.
5. Which banks support UPI Lite?
Several banks in India support UPI Lite, but the availability and support for UPI Lite can vary over time, so it’s advisable to check with individual banks or the NPCI.
6. What is the difference between UPI Lite and UPI Lite X?
UPI Lite is a feature that allows users to make small-value transactions without entering a PIN, enabling quicker payments for everyday expenses. In contrast, UPI Lite X enhances this functionality by enabling offline transactions using Near Field Communication (NFC) technology, allowing payments to be made in areas with low or no internet connectivity.
