RBI boosts UPI Lite: faster transactions, higher limits » Finance & Banking

In a bid to accelerate the digital payments landscape in India, the Reserve Bank of India (RBI) has significantly expanded the scope of UPI Lite. Following the recent Monetary Policy Committee meeting, the central bank announced major changes aimed at improving the ease of small-value digital transactions.

Major updates:

• UPI Lite transaction limit increased from Rs 500 to Rs 1,000
• Overall UPI Lite wallet limit increased from Rs 2,000 to Rs 5,000

The changes will make daily transactions smoother for millions of Indians, from buying groceries to paying for rides.

Learn about UPI Lite

UPI Lite is essentially a simplified version of the Unified Payments Interface (UPI), customized for fast, low-value transactions. Unlike standard UPI, which withdraws funds directly from a bank account, UPI Lite functions more like a digital wallet. Users can now maintain a balance of up to Rs 5,000 in this wallet, thereby speeding up transactions without having to enter a PIN every time they make a payment.

This approach would not only speed up small payments but also reduce the load on core banking systems – a crucial factor given India’s growing digital transaction volumes.

Setting up UPI Lite

For those eager to take advantage of these enhanced features, here is a quick guide to launching UPI Lite on the popular payment app:

Bhim UPI

1. Open the BHIM UPI app on your smartphone.
2. Click the menu icon in the upper left corner (usually three horizontal lines).
3. Find and select the “UPI Lite” or “Enable UPI Lite” option.
4. Select the bank account you want to associate with UPI Lite.
5. Enter the amount you would like to add to your UPI Lite balance (remember, the new limit is £5,000).
6. Enter your UPI PIN to confirm the addition.
7. Upon confirmation, your UPI Lite account will be activated and ready for small transactions up to Rs 1,000, no PIN required.

Alipay

1. Open the Paytm app on your smartphone.
2. Open the app and click on your profile in the upper left corner. Then, select “UPI and payment settings” and click on “Launch UPI Lite”. Alternatively, you can use the search bar by typing “UPI Lite” and selecting “Configure UPI Lite.”
3. Enter the amount to activate UPI Lite and select your preferred payment method. Then, click “Continue.”
4. Your UPI Lite will be activated for small transactions.

Telephone

1. Open the PhonePe app.
2. On the home screen, look for the option to enable UPI LITE.
3. Enter the amount to be added to UPI LITE and select your bank account.
4. Enter your UPI PIN to successfully activate UPI LITE account.

Google Pay

1. Open the Google Pay app.
2. Click on your profile picture in the upper right corner.
3. Select “UPI Lite Payment without PIN”.
4. Enter the amount you want to add.
5. Enter your UPI PIN.

market impact

The update is expected to further boost India’s digital payments ecosystem. The Reserve Bank of India aims to encourage wider adoption of digital payments, especially among small merchants and rural areas, by making small-value transactions more convenient.

Fintech analysts predict that this move may lead to a significant increase in UPI transaction volume, which may in turn reshape consumers’ daily purchasing behavior.

As India continues to move towards a cashless economy, innovations like UPI Lite play a vital role. Not only do they enhance the user experience, they also help achieve broader financial inclusion goals.

For consumers, the message is clear: digital payments for daily refreshments or bus fares just got easier.

(Note: This article is based on information available as of April 2024. Users should verify with their respective banks and payment apps for the latest features and limitations.)