What is UPI Lite? Features, Benefits and Everything You Need to Know

The National Payment Corporation of India (NPCI) has brought us the Unified Payment Interface (UPI), which has made digital payments super convenient. Apps like Google Pay, Paytm, and PhonePe have become our go-to tools for transactions. However, there’s something new on the horizon – UPI Lite. It’s changing the way we make small payments, and we’re here to explain how.

What is UPI Lite?

UPI Lite is a fresh addition to India’s digital payment landscape. It’s designed to simplify small transactions, and here’s why it matters: around 75% of retail transactions in India are under Rs. 100, and nearly half of all UPI transactions are within Rs. 200. UPI Lite is tailor-made for these smaller payments.

Also Read: How to Find Mobile Number Using UPI Id?

How Does UPI Lite Work?

UPI Lite is an “on-device wallet.” To use it, you must add funds from your UPI or bank account to this app. You can keep a maximum of Rs. 2,000 in your UPI Lite wallet.

UPI Lite Maximum Limit

Once you have funds, you can make payments offline. However, you’ll need an internet connection to add funds initially. Each transaction with UPI Lite can go up to Rs. 200. In August 2023, the RBI increased this limit to Rs. 500.

The best part is, if you already have a UPI ID, you won’t need to redo the KYC process.

UPI Lite Features

Here are some key features of UPI Lite:

1. Speedy Transactions: UPI Lite lets you make transactions faster without downloading a separate app. You can use it within apps like Paytm for quick transactions.
2. User-Friendly: UPI Lite is easy to use, making it accessible to many users. It simplifies sending and receiving money.
3. Works with All Banks: It’s compatible with all banks, meaning you can transfer funds from any bank account without limitations.
4. No Extra Costs: UPI Lite transactions don’t come with extra fees, making it a cost-effective way to send money.
5. High Security: UPI Lite uses multi-factor authentication for security. It also has a PIN-based system for added protection.

How to Transfer Funds to UPI Lite?

To use UPI Lite, you should already be registered on the UPI app. After that, enable the “On-Device wallet” option on the UPI app. Then, transfer funds from your bank account to the Lite version, keeping the balance under Rs. 2,000. You can add funds online with additional factor authentication (AFA) or through UPI AutoPay.

Currently, you can only make debit transactions offline with UPI Lite. Credit transactions, including refunds, will be done online to your bank account.

Setting Up UPI Lite on BHIM App

If you’re using the BHIM app and want to set up UPI Lite, follow these steps:

1. Download and install the BHIM app.
2. Tap “UPI” on the home screen, then select “Link your Bank Account.”
3. Choose your bank, set a UPI PIN.
4. Access UPI Lite via “Scan & Pay” and select “UPI Lite.”
5. Enter the recipient’s UPI ID or scan the QR code to complete the transaction.

UPI Lite Benefits: Why UPI Lite Matters

UPI has become a popular payment method, but most transactions are small. UPI Lite can handle these smaller transactions offline, reducing congestion and glitches in the system.

Benefits for Banks

With fewer transactions clogging the digital banking system, banks can process big transactions more efficiently, especially through systems like NEFT and RTGS.

Supported Banks

Initially, eight banks supported UPI Lite, with three more added later. As of August 2023, 11 banks support UPI Lite, including Canara Bank, HDFC Bank, Indian Bank, Kotak Mahindra Bank, Punjab National Bank, State Bank of India, Union Bank of India, Utkarsh Small Finance Bank, Axis Bank, Central Bank of India, and Paytm Payments Bank.

Exciting News: UPI Lite Expanding

In a recent report, PhonePe and Paytm, two leading third-party UPI payment apps, are planning to introduce UPI Lite features. This expansion will allow users of these apps to use UPI Lite for smaller transactions, making digital payments even more convenient.

In Short

UPI Lite is making small transactions in India easier and more efficient. It’s designed to handle the kind of payments we often make, like buying a cup of tea or snacks. With UPI Lite, you can send money quickly and securely, even without a strong internet connection. It’s a helpful addition to India’s digital payment options, and as it grows, it will make our daily transactions smoother. So, keep an eye out for UPI Lite in your favorite payment apps—it’s changing the way we pay for the better!

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