The Unified Payments Interface (UPI) is a platform that enables digital payments between banks and customers. Merchants can use the UPI platform to receive payments from customers, and banks can use the platform to process payments from merchants.
UPI was launched in November 2016 as a joint project of the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI). The UPI platform is currently available in multiple countries. The UPI platform has been adopted by major banks in India, including Axis Bank, HDFC Bank, ICICI Bank, State Bank of India, etc.
What is UPI Lite?
UPI Lite is a feature where anyone can transfer funds up to 200 INR without a PIN. It’ll be similar to any other wallet where one can add funds and use them to pay via UPI Lite feature.
How will UPI Lite work?
UPI lite will be launched by India’s leading digital payments companies, PhonePe and PayTM. Further updates will be shared when the feature goes live for customers. Users have to enable UPI Lite once it is live on their app before they can use the features.
UPI Lite is an on-device wallet feature where you have to add funds before you pay using UPI Lite. A maximum of 2000 INR can be added to your UPI Lite wallet, and the same will be used to pay without using your PIN. Adding funds to UPI Lite can be done using UPI or a bank account.
For now, customers will only be able to process debit transactions offline via UPI Lite wallet, all other credit transactions to UPI Lite will be done to the bank account.
Why UPI Lite?
As per various reports, it’s been observed that the majority of the UPI transactions are of low value. More than half of the UPI transactions are less than 200 INR. In addition to that, UPI transactions are increasing rapidly, which is why UPI also faces technical issues that ultimately result in transaction failure. Due to this, UPI Lite has been introduced by the NPCI (National Payment Corporation of India), where transactions of less than 200 INR can be done offline via UPI Lite. This will decrease the load and reduce the failure rate of online transactions.
Read the ET article for more information on UPI Lite.
Also Read: MeitY bans 94 loan apps,138 betting apps associated with Chinese entities