Reserve Bank of India (RBI) recently rolled out Unified Payments Interface (UPI) Lite to lift the user experience of digital payments to the next level. UPI Lite is expected to provide users with a convenient solution for faster and simpler low-value transactions.
At present, India is thriving on low-value UPI payments with 50 percent of transactions through UPI below Rs 200, according to the National Payments Corporation of India (NPCI). With UPI Lite enabled on the BHIM app, users will be able to make small-value transactions in a near-offline mode i.e. without internet.
Here are key things to know about UPI Lite:
How does it work?
UPI Lite allows feature phone users to access UPI networks and make digital payments straight from their bank accounts using their phones.
Customers will first have to add funds from their bank accounts to the app (using internet connectivity) by authentication (AFA) or through UPI AutoPay, which needs to be registered online using an AFA.
It's vital to note that the UPI Lite balance in the app is only a virtual ‘on-device’ balance and a reflection of the UPI Lite balance allocated by the user in the account. No interest will be payable on this balance. This means that the actual money or funds with respect to the UPI Lite balance are not transferred to or received by NPCI from the issuing bank. The actual money/funds with respect to the UPI Lite balance is held and maintained with your issuing bank.
After adding funds, UPI Lite can be accessed and transactions can be carried out. No separate authorisation or UPI PIN is required for carrying out this transaction. Also, no internet connectivity is necessary for this.
What is the transaction limit in the case of UPI Lite?
The upper limit of a UPI Lite payment transaction is Rs 200 while the total limit of UPI Lite balance for an on-device wallet is Rs 2,000 at any point in time.
Which banks are offering UPI Lite now?
Eight banks are live with the feature including
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.
What happens to balance in case a user disables UPI Lite?
If access to UPI Lite is disabled, the unutilised balance will be credited to the account by the issuing bank. Any refund or reversal of funds under a transaction will appear in the account only and not in the app.
Will the bank statement display UPI Lite top-up?
UPI Lite transactions other than top-up transactions will not be displayed in the statement (passbook) of the account. Users will receive SMS once a day for
UPI Lite transactions from the issuing bank containing the history of transactions carried out during the day.
How can UPI Lite help the banking sector?
UPI Lite can reduce the debit load on the core banking system, thereby improving the success rate of transactions further, enhancing the user experience, and taking us one step closer to processing a billion transactions a day on the UPI platform, according to
NPCI.
