What is UPI Lite 2024: how to activate, benefits, limitations

UPI Lite is a simplified version of the Unified Payments Interface (UPI) payment system that was launched by the Reserve Bank of India (RBI) in September 2022. UPI Lite is designed to make small-value transactions (up to ₹200) easier and faster.

With UPI-Lite, you can make payments without having to enter your UPI PIN. You also do not need to complete any KYC formalities. This makes UPI-Lite a more convenient, affordable, and accessible way to make small-value payments.

In this blog post, we will discuss what UPI-Lite is, how it works, and how you can use it. We will also look at some of the benefits of using UPI-Lite.

what-is-upi-lite
what-is-upi-lite

What is UPI Lite?

UPI Lite is a feature of the Unified Payments Interface (UPI) payment system that allows users to make small-value transactions without entering their UPI PIN. This feature is enabled by the National Payments Corporation of India (NPCI) and is known as an “on-device wallet.” UPI-Lite is available on the BHIM app, which can be downloaded on devices with both iOS and Android operating systems.

Here are the key features of UPI-Lite:

  • Small-value transactions: UPI-Lite is designed for small-value transactions, up to ₹200.
  • No PIN required: Users do not need to enter their UPI PIN to make a UPI Lite transaction.
  • On-device wallet: UPI-Lite uses an “on-device wallet” to store the user’s funds. This means that the user’s funds are not stored on the UPI servers.
  • Lower transaction charges: The transaction charges for UPI-Lite transactions are lower than for regular UPI transactions.
  • No KYC required: UPI-Lite does not require KYC, so it is more accessible to people who do not have a UPI ID or who do not want to go through the KYC process.

UPI-Lite is a convenient and secure way to make small-value payments. It is a good option for people who do not want to enter their UPI PIN or who do not have a UPI ID.

UPI Lite benefits

Business benefits of UPI Lite for banks:

  • Scalable through enhanced transaction capacity: UPI-Lite can handle a large number of transactions without putting a strain on the bank’s core banking system.
  • No real-time load on core banking systems: UPI-Lite does not require the bank’s core banking system to be updated in real time, which can save the bank money on IT costs.
  • Better small payments management: UPI-Lite is designed for small-value payments, which can help banks to manage their liquidity more effectively.
  • Functionality in low or intermittent internet availability locations: UPI Lite can be used even in areas with low or intermittent internet connectivity.
  • Zero delays as it eliminates hops to remitter bank: UPI Lite eliminates the need for the transaction to go through the remitter’s bank, which can reduce delays in processing payments.
  • Zero business declines due to pre-approved model: UPI Lite uses a pre-approved model, which means that payments are more likely to be approved, even in low-risk cases.
  • Better customer experiences: UPI Lite can provide a better customer experience by offering faster, more convenient, and more secure payments.

Business benefits of UPI Lite for merchants:

  • Seamless instant payments from customers: UPI Lite allows merchants to accept instant payments from customers, which can improve customer satisfaction and boost sales.
  • High success rate: UPI Lite has a high success rate, which means that merchants are less likely to lose out on sales due to failed payments.

Business benefits of UPI Lite for customers:

  • Round-the-clock availability: UPI Lite is available 24/7, which means that customers can make payments at any time of day or night.
  • Better small value payment management: UPI Lite is designed for small-value payments, which can help customers to manage their finances more effectively.
  • Convenient to track: UPI Lite transactions are easy to track, which can help customers to keep track of their spending.
  • Single-click payments: UPI Lite allows customers to make payments with a single click, which can save time and effort.
  • Spends management with daily limit: UPI Lite allows customers to set daily spending limits, which can help them to control their spending.
  • No worry of hiding UPI Pin in crowded place for small value payments: UPI Lite transactions do not require customers to enter their UPI PIN in public, which can help to protect their privacy.

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More UPI Lite features

How UPI Lite works:

  • UPI-Lite is a feature of the Unified Payments Interface (UPI) payment system that allows users to make small-value transactions without entering their UPI PIN.
  • To use UPI-Lite, you need to add money to your UPI-Lite wallet from your bank account.
  • Once you have added money to your UPI Lite wallet, you can make payments by scanning QR codes, entering UPI IDs, or using your phone number.
  • UPI-Lite transactions are processed offline, so you do not need to be connected to the internet to make a payment.

Who can use UPI Lite it:

  • UPI-Lite is currently available to users of the following banks:
    • State Bank of India
    • HDFC Bank
    • Canara Bank
    • Kotak Mahindra Bank
    • Indian Bank
    • Punjab National Bank
    • Utkarsh Small Finance Bank

UPI Lite Transaction limit:

  • The maximum transaction limit for UPI-Lite is ₹200.
  • For transactions below ₹200, you do not need to enter your UPI PIN.
  • For transactions above ₹200, you will need to enter your UPI PIN.

Total UPI Lite balance limit on device wallet:

  • The total UPI-Lite balance limit on your device wallet is ₹2,000.
  • You can add up to ₹2,000 to your UPI Lite wallet at a time.

Type of transaction option available in UPI Lite:

  • Only debit transactions are available with UPI Lite.
  • Refunds and credits go directly to your linked bank account.

Is UPI Lite an offline or an online mode of transaction?

  • Debit payments can be made offline.
  • Credit into the account requires you to be online.

How to check upi lite transaction history:

  • You can check your UPI-Lite transaction history by sending an SMS to 567676 from your registered mobile number.
  • The SMS will contain a list of all your UPI-Lite transactions for the day.

UPI Lite disadvantages

Here are some of the disadvantages of UPI-Lite:

  • Lower transaction limit: The maximum transaction limit for UPI-Lite is ₹200. This means that you cannot use UPI-Lite to make larger-value payments.
  • No KYC required: UPI-Lite does not require KYC, which means that there is a higher risk of fraud.
  • Not available on all banks: UPI-Lite is not yet available on all banks.
  • Not available for all merchants: UPI-Lite is not yet available for all merchants.
  • Not available for all payment apps: UPI-Lite is not yet available for all payment apps.

Overall, UPI Lite is a convenient and secure way to make small-value payments. However, it is important to be aware of the limitations of UPI-Lite before you use it.

Differentiate between UPI Lite and UPI

upi-lite-vs-upi
upi-lite-vs-upi
FeatureUPI-LiteUPI
Transaction limitUp to ₹200Up to ₹1 lakh
PIN requiredNo PIN required for transactions below ₹200PIN required for all transactions
KYC requiredNo KYC requiredKYC required
Transaction typeOnly debit transactions allowedBoth debit and credit transactions allowed
Mode of transactionOffline and onlineOnline only
AvailabilityCurrently available to users of select banksAvailable to users of all banks that offer UPI

As you can see, UPI-Lite is a simplified version of UPI that is designed for small-value transactions. It does not require a PIN for transactions below ₹200, and it does not require KYC. UPI-Lite is also available offline, which means that you can make payments even if you do not have an internet connection.

UPI is the more comprehensive payment system. It allows for both debit and credit transactions, and it is available to users of all banks that offer UPI. However, UPI requires a PIN for all transactions, and it is an online-only payment system.

Which payment system is right for you depends on your needs. If you need to make small-value transactions quickly and easily, then UPI-Lite is a good option. If you need to make larger-value transactions or if you need to be able to make payments offline, then UPI is a better option.

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How to use UPI Lite?

Here are the steps on how to use UPI-Lite to make a payment:

  1. Open the UPI app on your phone.
  2. Tap on UPI-Lite.
  3. Enter the amount you want to pay.
  4. Enter the UPI ID or phone number of the recipient.
  5. Tap on Pay.

You will be prompted to enter your UPI PIN. But, If the transaction amount is below ₹200, you can skip this step.

Once you have entered your UPI PIN, the payment will be processed. You will receive a confirmation SMS on your registered mobile number.

Here are some of the ways you can make a payment using UPI-Lite:

  • Scanning a QR code: If the merchant has a QR code, you can scan it to make a payment.
  • Entering a UPI ID: If you know the UPI ID of the recipient, you can enter it to make a payment.
  • Entering a phone number: If you only know the phone number of the recipient, you can enter it to make a payment.

How to enable UPI Lite in any upi app (paytm, bhim upi, phone pay)

Here are the steps on how to enable UPI-Lite on your phone:

  1. Open the UPI app on your phone.
  2. Tap on the Profile or Settings icon.
  3. Tap on UPI-Lite.
  4. Read and agree to the terms and conditions.
  5. Enter the amount you want to add to your UPI Lite wallet.
  6. Tap on Enable UPI-Lite.

Once you have enabled UPI-Lite, you can start making payments by scanning QR codes, entering UPI IDs, or using your phone number. You can also check your UPI-Lite transaction history by sending an SMS to 567676 from your registered mobile number.

Here are the requirements for enabling UPI-Lite:

  • You must have a bank account that supports UPI-Lite.
  • You must have a UPI ID.
  • You must have a registered mobile number.
  • You must have a minimum balance of ₹100 in your bank account.

If you meet all of the requirements, you can follow the steps above to enable UPI-Lite on your phone.

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How to disable/close UPI Lite account?

To disable your UPI-Lite account, you can follow these steps:

  1. Open the UPI app on your phone.
  2. Tap on the Profile or Settings icon.
  3. Tap on UPI-Lite.
  4. Tap on Disable UPI Lite.
  5. Confirm that you want to disable your UPI-Lite account.

Once you have disabled your UPI-Lite account, the money in your UPI-Lite wallet will be refunded back to your bank account. You will also no longer be able to make payments using UPI-Lite.

The option to disable your UPI-Lite account must be available in the UPI app. If you do not see the option to disable your UPI-Lite account, you can contact your upi app customer support or bank for assistance.

For more information, read the Official NPCI UPI Lite Brochure.

FAQs

Q. What is UPI Lite?

Ans. A simplified version of UPI for small-value transactions (up to ₹200) that doesn’t require a PIN or KYC.

Q. Is UPI Lite safe?

Ans.  Yes, it uses the same security features as regular UPI payments.

Q. How to enable UPI Lite?

Ans. Check with your bank if they support UPI-Lite and enable it on your UPI app.

Q. How to make a payment using UPI Lite?

Ans. Open your UPI app, select UPI-Lite, enter amount, recipient’s details, and PIN (if transaction amount > ₹200).

Q. How to check my UPI Lite balance?

Ans. Open your UPI app>select UPI-Lite>and check your balance.

Q. How to disable UPI Lite?

Ans. Open your UPI app>select UPI-Lite>click on the disable upi lite. If option is not available into your app, then contact your bank cumtomer support.

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