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UPI Lite: How Will It Bring A Change

With UPI Lite, the majority of the small transfers can be taken offline

Making digital payments from India or other countries has become easier these days, because the Reserve Bank of India (RBI) has taken a very important step to take digital payments to the next level as RBI Governor Shaktikanta Das has launched UPI Lite, RuPay credit card on UPI and Bharat BillPay cross-border bill payment at the Global Fintech Fest 2022.

It has been seen that a large portion of the UPI transactions are a lot more modest when compared with different channels. Almost three-fourths of UPI payments are of little values.

Half a month prior, UPI confronted technical errors and rate rejections higher than normal. With UPI Lite, the majority of the small transfers can be taken offline, so UPI gets cleaned up and more productive. This initiative will revolutionise the digital payment ecosystem.

What is UPI Lite?

RBI has launched UPI Lite in India for low cost transactions. UPI Lite will work like UPI but it is faster and simpler than that. It allows users to send money quickly even during downtime and peak hours. With UPI Lite, one can pay a maximum of Rs 200 to any one person at a time. Also, the total limit of UPI lite balance will be Rs 2,000 only.

Suhail Sameer, CEO, BharatPe said, "UPI Lite is set to revolutionise the digital payment infrastructure in the country especially in the rural areas where seamless internet connectivity is still a concern. It will not only decongest the banking system, but will also increase the value proposition by providing a convenient solution for faster and simpler low-value transactions. It will ensure better success rate of transactions, thereby building more trust in UPI amongst users. This will be instrumental in further accelerating the adoption of UPI across the country."

UPI Lite is an 'on-device' wallet where users can add money and use them to send money to anyone instantly. One of the special features of UPI Lite is that it works without internet connection.

How does it works?

As UPI Lite is a wallet, users need to add funds to the wallet when they are online (with internet access), and then users can send money to anyone instantly, even when there is no internet. But note that the money will not be credited if the recipient is offline. He will get money when the internet connection is active. However, the NPC is planning to make UPI Lite completely offline.

"UPI Lite distinguishes itself by allowing QR code-based payment even in case of a near-offline mode, putting efficiency at the forefront of the user's payment experience. It will also offer the convenience of faster and simpler low-value transactions. With a balance limit of Rs 2,000 and a payment transaction’s upper limit of Rs 200, UPI Lite would help banks process payments more efficiently," said Sameer.

Also, UPI Lite does not require UPI PIN, it will directly access and use amount in the wallet. The thing to note here is that there is a limit to the amount of money one can add to your UPI Lite wallet. Because it works without internet, only up to Rs 2000 can be added to your wallet. Also, you can send a maximum of Rs 200 per transaction. However, you can do unlimited transactions in a day. UPI Lite is believed to be for low cost payments.

How will it bring a change?

With decreased traffic on the digital banking framework, there is supposed to be better accessibility of Core Banking System (CBS) to do high end exchanges, particularly on NEFT and RTGS. Consequently, UPI Lite will empower banks to productively handle installments, of both of all shapes and sizes esteem.

Sameer said, "The offering is going live with eight banks including Canara Bank, HDFC Bank, Indian Bank, Kotak Mahindra Bank, Punjab National Bank, State Bank of India Union Bank of India and Utkarsh Small Finance Bank. It is heartening to see key players in the ecosystem of financial services coming together and enabling UPI to a whole new set of customers. The improved customer experience will in turn enable more customers to join the UPI bandwagon."

UPI payments is engaging India and Indians with quicker and more proficient monetary exchanges. Presently, with the launch of UPI lite, this is expected to go a score up, particularly for small money transfers. The clients and banks will benefit with the beginning of the UPI lite.


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