Explained: How UPI LITE makes small payments faster & easier

Explained: How UPI LITE makes small payments faster & easier
UPI vs UPI LITE Image credits- Unsplash

  • UPI LITE lets you do instant transactions of up to ₹200 or less without using a PIN.
  • Transactions are made using a wallet and not from a linked bank account.
  • Transactions are faster and have an improved success rate.
Have you been frustrated when making UPI payments because your bank’s servers were down? With Paytm Payments Bank launching UPI LITE, that may be a thing of the past.

UPI LITE is a feature enabled by National Payments Corporation of India (NPCI) for multiple small value UPI transactions. It enables faster real-time transactions with a single click.

UPI LITE was launched by the Reserve Bank of India in September 2022 and BHIM app has been allowing these transactions since the end of September last year.

“UPI is the most versatile of payment options and its popularity continues to rise. So it is inevitable that there are newer innovations happening around it,’ says Adhil Shetty, CEO, BankBazaar.com.

In case of UPI LITE, you can conduct transactions using an ‘on-device’ wallet and not from a linked bank account. Once loaded, a UPI LITE wallet allows a user to do instant transactions of up to ₹200, thus making it easier to make low value transactions.

According to a NPCI circular issued in May 2022, 50% of the total UPI transactions are of value of ₹200 and less, so UPI LITE will benefit a lot of customers.

A maximum of ₹2,000 can be added twice in a day to UPI LITE, making the cumulative daily usage up to ₹4,000. Additionally, with UPI LITE, users can carry out a large number of small value UPI payments in a superfast manner without worrying about cap on the number of bank transactions. Users do not need to key in a four or six digit pin to use UPI LITE and this makes way for quicker and hassle-free payments.

According to the NPCI website, since UPI LITE transactions do not utilize the remitter banks core banking system, there is an improved rate of success. Plus, since one can make several transactions after loading their wallet once, the passbook gets less cluttered.

Steps to set up and use UPI LITE

  1. Open the Paytm app on your phone.
  2. Tap on the ‘Profile’ button on the top left corner.
  3. Click on ‘UPI and Payments Settings’ and and click on ‘UPI LITE’ under the ‘Other Settings’ option.
  4. Choose a bank account that is eligible for UPI LITE.
  5. Enter the amount you want to add to the UPI LITE account and ‘Add Money’ to activate UPI LITE.
  6. Enter your MPIN to validate your UPI LITE account.
  7. Once the UPI LITE account is set up, you can make payments with a single click without using a PIN.

Difference between UPI and UPI LITE

What is it?UPI is a round-the-clock payment system that enables real-time instantaneous transfer of funds between two bank accountsUPI LITE is a feature that allows users to make small-value payments real-time using an on-device wallet
Is PIN mandatory?A 4 to 6-digit PIN is mandatoryAt present, you don't need a PIN to send money through UPI LITE
Transaction LimitThe upper limit per UPI transaction is ₹2 lakhThe upper limit is ₹200. Meanwhile, the total balance of the on-device wallet can be up to ₹2,000
Can you receive money?YesAt present, it is only possible to make debit transactions using your UPI LITE wallet. Any funds credited to UPI LITE will be directly transferred to your bank account
Who can use it?More than 100 banks' customers are able to use UPI through various applications such as BHIM, Google Pay, Paytm, PhonePe, and mobile banking applicationsThe BHIM app has now enabled the UPI LITE feature, which is currently available to customers of eight banks
How to check transaction history?Open app> Home screen > Click on view transaction historyYou will receive an SMS daily containing the history of UPI LITE transactions carried out during the day from the bank