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

In a bid to adopt a simpler payment interface in the country, the Reserve Bank of India (RBI) has recently launched the Unified Payment Interface (UPI) Lite. The new interface should be a faster and more convenient solution for simpler low value transactions. The biggest appeal of the interface is that users can perform 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 UPI PIN. Currently, when 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 digitally the same way smartphone users transfer money directly from their bank accounts.

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But the method will need internet partly. Customers will first need to add funds from their bank accounts to the app (using internet connectivity) through authentication or via UPI AutoPay. Users must register online using Extra Factor Authentication (AFA) for each subscription payment.

How will this work?

It should be noted here that the UPI Lite balance displayed in the app is only the virtual balance.

Simply put, UPI Lite transactions will not show up on your bank account statement or passbook. Once a user has added the funds online, they can access UPI Lite offline and transactions can be made. No separate authorization or UPI PIN is then required for the transaction.

Also, 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 handle disputes regarding the transfer of funds, activation, top-ups, or deactivation of UPI Lite, as per the NPCI website.

If a user deactivates UPI Lite, the unused balance will be credited to their 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. This means that debit payments can be made without internet, while credits can only be made online.

However, in the next phase, NPCI plans to launch full offline mode, where customers can process transactions – both debit and credit – in full 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 intended for small value transfers. Therefore, for these transactions, users will not need an UPI PIN, as listed on the NPCI website. The total UPI Lite limit for an on-device wallet is set at Rs 2,000 at any given time.

Who can use it?

UPI Lite functionality is now available on the BHIM app, as per NPCI. Currently, 8 banks have UPI Lite functionality 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.

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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 footfall and improve user experience. Finally, the interface would be the next step of a billion transactions per day on the UPI platform, which is the next target.

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