What is UPI Lite Payment Wallet and its Transaction Limit?

UPI Lite is the new facility of UPI Payment system. This facility has made the payment easier. This system works even without the internet. Thus it is very useful in case there is no internet or no data in your phone.

The Offline Transaction Through the UPI Lite

Often our daily data gets exhausted. Thus, without the data we can’t use the UPI. But the UPI Lite facility would help in this case.

It does not require the internet for making a payment. You can send money even without any internet connectivity.

In fact, NPCI is launching the UPI Lite facility in two phases. In the first phase, all the payments can be done offline. But, you need internet connectivity at some point.

However, In the second phase, there would not be a need for the internet altogether. It would work in feature phones which don’t have any data plan.

The Wallet Facility of the UPI Lite

To make payment without the internet, the UPI Lite system relies on the wallet feature. All the transactions of UPI Lite are processed through the Wallet.

The UPI Lite wallet is similar to the Paytm Wallet and Phonepe Wallet. Like other wallets, you have to add an amount. You can use this amount later for offline payments.

Subsequently, You have to top up the wallet every time there is less amount. You can top-up your wallet while being online. you can’t do it without internet.

The UPI Lite wallet is called the On-Device Wallet. Since, All the transaction related data remain in your mobile thus this wallet is called the On-device Wallet.

Because of this on-device wallet, we don’t require internet. Whereas, in case of paytm and Phonepe, the wallet data is stored in their servers. Therefore, we require the internet to connect with the servers.

How Does UPI Lite Work

1. We have to activate UPI Lite service in our UPI App
2. As we activate this service, the UPI App creates an on-device wallet. The app forms this wallet in our mobile phone. But we can’t find it out as it is encrypted.
3. We add money to the UPI Lite wallet.
4. As we add money to the wallet, the bank puts aside that amount. Now we can’t use that amount for the regular payment. We can use it only through the UPI Lite Wallet.
5. Now you can see the balance in your Wallet.
6. You can make payment using this wallet. It does not require the internet. The transaction entry is made on your device only. This transaction information does not immediately go to the bank. Thus, you can’t see these transactions in your bank statement.
7. your account would have only entries of wallet top up.
8. The transaction history of the UPI lite can be seen only in the UPI app. It would not reflect in your passbook.

UPI Lite Limits

The NPCI has Designed the UPI Lite feature for small value transactions. Thus, you can’t use it for a big amount. The maximum payment amount through the UPI Lite can be of upto ₹200. If you want more than ₹200, you have to use a normal UPI system which requires the internet.

You can keep a maximum ₹2,000 in the UPI Lite wallet. So, you have to top up this wallet as the money gets exhausted.

Multiple Wallets

You can have many UPI Lite wallets. Thus it effectively increases your Limit. You can have as many walles as the UPI apps installed in your mobile phone.

Suppose you have Google pay, Phonepe and Paytm installed in your mobile. In this case, you have one wallet in each of the upi apps. Thus you would have a total of 3 wallets. you can put ₹2000 in each of the wallets.

However, you don’t need multiple wallets if there is no issue with the internet. As you can top up your wallet when required. You can also use the UPI Autopay feature to add money automatically.

No Need of UPI PIN

The UPI Lite feature does not require UPI PIN to make payment. Like the Paytm and Phonepe wallet, you have to only submit the payment amount. You don’t require authentication.

The elimination of PIN entry would make this system very fast and convenient. However, There may be authentication before opening the UPI app. Still the UPI Apps require PIN or fingerprint scanning for opening.

Benefits to the Users

Now, you have a fair idea of the features. But there are other advantages as well. Let’s list the benefits of UPI Lite.

• The system is very fast as it does not require connection to the bank and NPCI servers.
• There would be less transaction failure as there would not be connectivity issues or server error.
• The bank statement would be uncluttered as small value transactions would not appear in the bank statement.
• The UPI Lite balance would be shown all time in the app. Thus there would not be the requirement to check balance.

UPI Lite Benefits to the Banks

Various studies on payment systems have observed that about 75% of the total volume of retail transactions (including cash) in India are below ₹100 transaction value.

To process billion-a-day transactions The banks need robust IT infrastructure. The UPI Lite feature would decrease the load from bank servers. As, its transaction would not involve the bank servers.

Disadvantages of UPI Lite

The first disadvantage of UPI Lite is that it still needs the internet for credit in the wallet.

The limit of ₹2000 in wallet is very low. It may be exhausting within a week.

This wallet does not give any interest. Whereas, balance in the bank account gives us interest.

It is still unclear whether the recipient of money would get immediate notification or not. However, the sender can show the successful payment message to the recipient.

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