The Unified Payments Interface (UPI) has become a game-changer in India’s quickly developing digital payments landscape, completely changing how people exchange money. The world of digital finance has advanced significantly with the launch of UPI Lite, making financial transactions even more convenient and accessible for everybody. What is UPI Lite, and how is it different from the UPI system as it is now? Let’s examine this creative payment method in more detail.
Detailed Overview of What is UPI Lite?
UPI Lite functionality is provided, encompassing the capability to scan UPI QR codes and transfer funds to Virtual Payment Addresses (VPAs), phone numbers, bank accounts, and UPI IDs. Its design ensures speedy and dependable transactions even during periods of high UPI traffic, thereby reducing the likelihood of unsuccessful payments. With the option to add funds up to Rs. 2,000, the maximum transaction limit is set at Rs. 500. Transaction histories are organized within the app, facilitating easy access to a summary of all payments made.
In December 2022, there were UPI transactions in India totaling over $7.82 billion. On the other hand, the majority of UPI payments and statements are massive, as are small-ticket transactions. Therefore, UPI was introduced by the RBI and the National Payments Corporation of India (NPIC) to maintain convenience. A UPI PIN is not required when using a UPI Lite digital wallet account, which is designed for small-value transactions under Rs. 200. A UPI account can have a maximum limit of Rs. 2000.
How Does UPI Lite Work?
It provides users in India with a convenient way to conduct small-value transactions by functioning similarly to a wallet within the UPI payment gateway. With compatible apps, you can activate UPI Lite and quickly add money to your UPI account up to Rs. 2,000.
The ability to accept UPI payments and make payments under Rs. 500 without a UPI PIN is one of UPI Lite’s main features. UPI Lite eliminates the need for an intermediary wallet balance by transferring money directly to the recipient’s UPI account, unlike traditional wallets.
By doing this, the burden on banks’ Core Banking Systems (CBS), which are normally saved for high-value transactions, is lessened during peak UPI loads. By moving the majority of the transaction handling process from banks to UPI apps, UPI Lite essentially streamlines the core banking process. As a result, small-value payments through the UPI payment gateway are now more effective and user-friendly.
Benefits
- Hassle-free small-value payment gateway: You don’t need a UPI PIN to quickly pay for small-ticket items when using UPI Lite.
- Versatility: With UPI Lite, you can transfer money using bank accounts, VPAs, UPI IDs, phone numbers, and QR codes.
- Reliable transactions: UPI Lite guarantees fast and dependable processing of transactions under Rs. 500 even during periods of high demand on the UPI infrastructure.
- No limit on transactions: You can use UPI Lite to conduct as many transactions as you like each day, as long as the total amount stays under the Rs. 4,000 daily cumulative limit.
- Organized transactions: You can easily track your payment history with the app’s organization of all the transactions you’ve made using UPI Lite. Also, this lessens the disarray in the bank passbook.
Features
- You fund your account with up to Rs. 2000.
- The maximum amount you can pay in a single transaction is Rs. 200.
- Your UPI PIN is not required each time you conduct a small-value transaction.
- Credit or debit cards should not be used to add money; only UPI accounts should be used.
- Because all of your UPI lite transactions are only recorded in the app and do not appear on your bank statements, UPI lite keeps your bank account statement clear.
- Instead of going through the digital wallet, the credited or transacted funds will be sent straight to the recipient’s bank account.
How to Get Started?
- From the Google Play Store or other app stores, install the app.
- Open the app and input the phone number that is connected to your bank account.
- Authenticate the mobile number using an OTP.
- To protect your transactions, create a UPI PIN.
- Connect the UPI Lite app to one or more of your bank accounts.
- Enter the recipient’s information and choose the preferred transaction type to begin using UPI Lite.
FAQ’s
Q1. Who invented it?
Ans. Modern UPI lite technology was introduced by the National Payments Corporation of India (NPIC), and it was endorsed by the RBI. Maintaining the order of the small-value transactions was the goal.
Q2. When is UPI Lite available?
Ans. You can start as soon as you enable it in your mobile wallet. Your UPI lite account setup may require authentication; however, as soon as you’re ready, you can use it right away.
Q3. Is it a secure option?
Ans. Although it is equipped with security features to guarantee secure transactions, the limitations of entry-level phones and connectivity choices may make it less secure than the entire UPI system.
Q4. Can I use offline?
Ans. No, It normally needs a network connection to conduct transactions and depends on simple phone connectivity like USSD. It is therefore inoperable without a network connection. However, it might function without an internet connection.
Conclusion
In terms of democratizing digital payments and promoting financial inclusion in India, it has a huge advancement. It removes obstacles and enables millions of people and companies to engage in the digital economy by utilizing innovation and technology. UPI Lite is more than just a payment solution thanks to its intuitive interface, wide range of compatibility, and strong security features; it’s a driver of prosperity and advancement for everybody.