UPI Lite: In the era of digital payments, UPI has made everyday life very easy. From grocery stores to online shopping and cab booking, use of UPI has become common everywhere. But many people find it cumbersome to enter the PIN every time they make a payment, especially in small amount transactions. To solve this problem, National Payments Corporation of India (NPCI) started the UPI Lite facility in September 2022. With its help, users can make payment of small amounts even without entering the PIN.
What is UPI Lite?
UPI Lite is actually a lighter and faster version of UPI, which has been specially designed for small transactions. In this, the user transfers a fixed amount from his bank account to his UPI Lite wallet. After this, using this balance, payment up to Rs 500 can be made without entering the PIN.
Why was UPI Lite started?
- Frequent PIN problems in small transactions – Most of the payments made through UPI in India are of small amounts like Rs 20, 50 or 100. Entering the PIN every time not only takes time but also becomes a hassle at times. The objective of UPI Lite was to make such small payments faster and easier.
- Problem of transaction failure- UPI has a direct connection with the bank server. Transactions often fail during peak times or when the network is slow. Due to this, both the user and the shopkeeper get troubled. In UPI Lite, payment is done from pre-loaded balance, which reduces the chances of failure.
- Increasing technical pressure on banks – For every small payment, a request is made to the bank server. Crores of small transactions started putting a heavy load on the banks’ systems. Reducing this pressure through UPI Lite was also a big objective.
- Promoting cashless micro-payments – The government and NPCI wanted even the smallest payments to be digital. Pinless and faster payments also promote digital payments in micro-payments like tea, auto, vegetables etc.
How did UPI Lite start?
- NPCI initiative- UPI Lite was started by National Payments Corporation of India (NPCI). It was made a simple and lightweight version of the UPI system, so that small transactions can be done easily.
- Concept of on-device wallet – UPI Lite was designed like a small wallet on the mobile phone instead of directly linking it to the bank account. The user first adds a limited amount from his bank account and then makes payment from the same balance.
- Limited amount and control – Limits were set keeping security in mind. Permission was given to keep up to Rs 500 in one transaction and total balance up to Rs 2,000. This reduced the risk and also maintained the convenience.
how does it work
UPI Lite is very easy to understand. First of all, the user activates UPI Lite by going to his UPI app. After this, a fixed amount from the bank account, like Rs 1,000 or Rs 2,000, is added to UPI Lite. Whenever a small payment has to be made, the app automatically deducts the amount from the UPI Lite balance. During this time, there is neither any need to enter UPI PIN nor is there much risk of transaction failure.
Up to how much rupees can be paid
According to NPCI rules, a maximum payment of up to Rs 500 can be made at a time through UPI Lite. At the same time, a maximum balance of up to Rs 2,000 can be kept in UPI Lite wallet. This limit has been set so that the user gets convenience and security is also maintained.
Which transactions are most beneficial?
UPI Lite is especially useful in places where small amount transactions are prevalent. As-
- tea, coffee or snacks shop
- Auto, Bus or Metro Tickets
- Grocery and vegetable market
- Small payments like parking fees or tolls
- Making immediate payment at all these places without entering the PIN saves time.
What is the difference between UPI Lite and normal UPI?
The biggest difference between normal UPI and UPI Lite is the PIN. While in normal UPI it is necessary to enter PIN for every transaction, in UPI Lite it is not required for small amounts. Additionally, UPI Lite transactions are not made directly from the bank account but from the UPI Lite balance. This reduces the server load and also reduces the problem of failed transactions.
How to activate UPI Lite
It is very easy to start UPI Lite.
- Update your UPI app.
- Select UPI Lite option in the app.
- Add the fixed amount from the bank account.
- Now make small amount payments without PIN.
