UPI LITE- What is UPI Lite, Benefits and How to Set-Up?

Published: Friday, December 23, 2022, 22:34 [IST]

The Unified Payments Interface (UPI) has transformed real-time payments in India. Traditional payment methods such as IMPS (Immediate Payment Service), NEFT (National Electronic Funds Transfer), and RTGS (Real-Time Gross Settlement) have been supplanted by UPI (Real Time Gross Settlement). The National Payments Corporation of India (NPCI) launched 'UPI Lite,' which allows users to make low-value transactions using the local wallet on their smartphone. Here is all you need to know about upi lite.

What is UPI Lite?

UPI Lite is an NPCI feature that allows users to make small-value payments offline. As a result, the new UPI Lite feature improves payment efficiency while reducing the strain on the banking system.
UPI Lite can only be used for transactions with small denominations. The feature is designed to handle transactions worth less than Rs 200. People will initially only be able to pay, with no ability to transfer money. UPI Lite Phase-2 will be released in the future to support credit transactions as well.

It should be noted that users can only add a maximum of Rs 2,000 to their UPI Lite app balance at any time. Furthermore, UPI Lite can make payments even when you are not connected to the internet, but you will need to be connected to the internet to add balance to your UPI Lite account. Furthermore, transactions with a maximum value of Rs 200 will be permitted.

Features-

To complete transactions, users will not be required to enter their UPI PIN.
UPI transactions will be possible even in the absence of the internet.
UPI Lite will support transactions of up to Rs. 200.
You can fund UPI Lite using your bank account.
Users can deposit a maximum of Rs. 2000 into their UPI wallet at any time.
Only the BHIM app currently offers UPI Lite.
In the App, you can only enable UPI Lite for one account.
You can check your UPI Lite balance by SMS but not through the app.
RuPay Credit Card on UPI, UPI LITE, and Bharat BillPay Cross-Border Bill Payments initiatives, when combined, have the potential to transform the digital payments ecosystem.

Benefits of UPI Lite

UPI transaction success rate has increased.
Remitter Bank's infrastructure load is reduced. CBS Passbook Uncluttered for Users
Single factor authentication with a single click for UPI transactions worth less than Rs .200

How Does UPI work?

There is a virtual balance on UPI Lite. This is only held by the issuing bank, not by the NPCI.
Between NPCI and the issuing bank, there is no money transfer or receipt.
On the UPI Lite balance, no interest will be paid.
The UPI Lite payment system is currently available only to customers of the following banks: State Bank of India (SBI), Union Bank of India, Utkarsh Small Finance, Canara, HDFC, Kotak Mahindra, Indian, and Punjab National Bank.
UPI Lite will process transactions in near offline mode, which means debit (payments) can be made without an internet connection and credits into the account will be done online. However, there is a future plan to make UPI Lite completely offline, allowing customers to conduct both debit and credit transactions.

Step-by-step guide on how to set up UPI Lite

Step 1: Go to Play Store or App Store and download the BHIM app.
Step 2: Open and sign into the app.
Step 3: If your bank account is not linked or set up, enter the bank's information.
Step 4: Scroll down the app and select UPI Lite.
Step 5: Review the information and click the 'Enable Now' button to activate UPI Lite.
Step 6: You can now deposit up to Rs 2,000 into your UPI Lite e-wallet.
Step 7: Choose a bank account and add funds to your wallet.
Step 8: Select the 'Enable' UPI Lite option.
Step 9: Type in your UPI PIN. Your UPI Lite e-wallet has been activated.