UPI payments now made easier with UPI lite; Here's how to use

On September 20, 2022, Reserve Bank of India (RBI) Governor Shaktikanta Das introduced UPI Lite, a faster and easier way to conduct low-value UPI payments. You must be aware of UPI payments since they have become an important part of our lives; however, with the advent of UPI lite, things may get a bit easier.

With the help of the UPI lite, you may add money from your main savings account to a local wallet that is created on your smartphone. Any UPI transaction with a value of less than Rs. 200 may be completed using this wallet.

The procedure for sending money to a recipient using a phone number or UPI ID or to a merchant using a QR Code is unchanged. The UPI App will immediately advise the user to send the money via the UPI lite method, i.e., local wallet, if the amount input by the user to transfer is less than Rs. 200.

You may use UPI lite to make payments without an internet connection by scanning any QR code. At least 75% of all retail transactions in India, including cash transactions, have a transaction value of less than ₹100. Additionally, the transaction value for 50% of all UPI transactions is up tp Rs. 200. The NPCI will only permit offline transactions up to ₹200 for this reason.

Phase 1 of UPI lite will involve offline transaction processing (debit offline and credit online). However, later on, both debit and credit transactions will be processed entirely offline.

Keep in mind that you can only add money to your UPI Lite wallet when you're using UPI AutoPay, which has been registered by the user in online mode with AFA, or when you're utilizing additional factor authentication (AFA), both of which require an Internet connection. The unused money will be credited to your bank account if UPI Lite is disabled.

Since UPI lite transactions are designed to be convenient for small-value transactions, no UPI pin is necessary. However, as the BHIM App requires you to input the Passcode before accessing any area of the app, this does not imply that UPI Lite is any less secure than standard UPI. Similar to contactless payments made with debit and credit cards, which only allow for a small number of transactions before skipping the extra step of entering the pin.

Except for top-ups, UPI Lite transactions won't appear on your bank account statement or passbook. Customers will get an SMS from the bank each day with a history of the UPI Lite transactions made that day.

When there is less activity on the payments platform, the core banking system, or CBS, is more readily available to process large-value NEFT and RTGS payments. UPI Lite would therefore enable banks to process payments more affordably.