What is UPI Lite: Features, Limit, and How Does It Work?

Launched by the Reserve Bank of India (RBI) in September 2022, UPI Lite is a new way to make payments faster and simpler. Designed to work alongside the popular UPI system, UPI Lite focuses on making small, everyday transactions smoother without the need for an internet connection or complex steps. With the growing demand for quicker payment methods, UPI Lite offers a convenient solution that’s easy to use, especially for small-value payments. Let's dive into what makes UPI Lite stand out, how it works, and what limits you should be aware of when using it.

What is UPI Lite?

UPI Lite is a feature designed for faster and simpler payments on leading UPI apps like Freo. It allows users to make small transactions without needing to enter a UPI PIN each time, making it especially convenient for quick purchases. The best part is that it doesn’t require any complex processes like e-KYC, so setting it up is straightforward. You can use UPI Lite to send or receive up to ₹500 per transaction, with a daily limit of ₹4,000 across multiple payments. This makes it a great option for handling day-to-day expenses quickly and securely, without the usual steps involved in regular UPI transactions.

How Does UPI Lite Work?

UPI Lite lets users add money to their account from a linked bank account, enabling easier payments for small transactions. Once the balance is topped up, users can carry out payments and transfers even without an internet connection, as long as it's a debit transaction. However, you'll need to be online when adding funds or making payments that require credit. This system is designed to make everyday transactions faster and simpler, especially when you're in areas with a weak or no internet connection, offering a convenient way to pay on the go.

What are the Features of UPI Lite?

1. No Need for UPI PINs

   With UPI Lite, you don’t need to enter a UPI PIN to make payments. This makes transactions quicker and easier since you can complete payments without the extra step of verifying your identity each time. It’s designed for smaller transactions, offering a more convenient way to pay without the usual security steps involved in traditional UPI payments.

2. No Extra Charges

   One of the benefits of using UPI Lite is that there are no additional fees involved in transactions. Unlike some other payment methods that may charge you for transfers, UPI Lite lets you send and receive money without worrying about extra costs. This makes it a great option for day-to-day payments.

3. No KYC Process Required

   Unlike traditional payment systems that require a detailed KYC process to verify your identity, UPI Lite does not require any such documentation. This makes it easier for users to get started quickly without having to provide personal details or go through long verification steps.

4. Works Offline

   One of the standout features of UPI Lite is that it works offline. This means you can make transactions even without an active internet connection. Whether you’re in an area with poor network coverage or need to send money quickly, UPI Lite allows you to continue your payments without needing to be connected to the internet.

5. Transaction Records

   With UPI Lite, all your transactions are organised and easy to track. It simplifies keeping tabs on your spending, making it simpler to understand where your money is going. This feature helps you stay in control and can even make budgeting a bit easier by giving you a clear picture of your expenses.

6. Refunds

   In case of an error or a disputed transaction, UPI Lite allows you to request a refund quickly. If a payment was unsuccessful or if you’ve been charged incorrectly, the system helps resolve issues and ensures your money is refunded without hassle.

Benefits of Using UPI Lite

1. Convenient Small Payments

   UPI Lite makes it easy to handle small payments without any extra hassle. You don’t need to deal with the complexities of entering long passwords or waiting for extra steps in the process. It's designed to offer a quick and smooth experience for everyday, small-value transactions like buying coffee or paying for quick services.

2. Dependable Transactions

   One of the standout features of UPI Lite is its reliability. When you make a payment, you can trust that it will go through smoothly. The system is built to ensure that your money reaches the right place without unnecessary delays, making it a trustworthy option for your daily transactions.

3. Flexibility for Various Needs

   UPI Lite is not just for one type of payment; it's versatile enough to suit a wide range of situations. Whether you’re paying for groceries, splitting a dinner bill, enjoying a movie, or topping up your mobile, UPI Lite handles it all. Its ability to work across different types of transactions makes it an excellent tool for various everyday needs.

How to Use UPI Lite?

UPI Lite can be accessed through several payment apps in India. Here's how you can set it up and use it on popular platforms like Google Pay, PhonePe, and Paytm.

Using UPI Lite on Google Pay:

1. First, make sure you have the Google Pay app installed on your phone.
2. Open the app and tap on your profile icon in the top right corner.
3. Look for the option that says 'Pay PIN-free UPI Lite' and select it.
4. You’ll be asked to enter the amount you want to add to your UPI Lite balance. You can add up to Rs. 2,000.
5. After entering the amount, you’ll need to provide your UPI PIN to complete the process.

Once these steps are done, the amount will be deducted from your linked account and added to your UPI Lite balance. You can now use this balance for faster payments.

Using UPI Lite on PhonePe:

1. Begin by downloading the PhonePe app from your app store, if you haven’t already.
2. Open the app, and tap on your profile picture, which is usually at the top of the screen.
3. Find and select 'UPI Lite' from the 'Payment Methods' section.
4. Enter the amount you want to add. You can add a maximum of Rs. 2,000 at a time.
5. Choose the bank account you want to link for UPI Lite and then enter your UPI PIN to verify the transaction.

After completing these steps, your UPI Lite account will be ready to use for payments without needing to enter your PIN each time.

Using UPI Lite on Paytm:

1. Open the Paytm app on your phone.
2. Tap on your profile picture located at the top left of the screen.
3. From the options that appear, go to ‘UPI & Payment Settings,’ then tap on ‘UPI Lite’ under ‘Other Settings.’
4. Select a bank account that supports UPI Lite to link with your Paytm account.
5. Enter the amount you want to add to your UPI Lite balance and tap on ‘Add Money to UPI Lite.’
6. To confirm the transaction, you’ll be prompted to enter your MPIN.

Once these steps are completed, your UPI Lite account will be activated on Paytm, and you can start using it for quick, PIN-free payments.

How to Transfer Money from UPI Lite to a Bank Account?

To transfer money from your UPI Lite account to your bank account, follow these steps:

• Step 1. Open the UPI app: Start by opening the UPI app that you have linked to your UPI Lite account. This could be any app where you use UPI for transactions.
• Step 2. Go to UPI Lite Settings: Once you're in the app, find the settings section related to UPI Lite. There should be an option that says "UPI Lite Settings" or something similar. Tap on that to proceed.
• Step 3. Deregister UPI Lite: In the settings menu, you’ll find an option to "Deregister UPI Lite." Select this option to unlink your UPI Lite account from the app.
• Step 4. Enter your UPI PIN: For security reasons, you will be asked to enter your UPI PIN to confirm the action. This step ensures that only you can make changes to your account.
• Step 5. Transfer of funds: After you’ve completed these steps, the remaining balance in your UPI Lite account will be automatically transferred to the bank account that was used to fund your UPI Lite wallet. This usually happens within a few minutes.

By following these simple steps, you can smoothly transfer your funds from UPI Lite back to your bank account whenever needed.

What’s the Difference Between UPI and UPI Lite?

UPI (Unified Payments Interface) facilitates real-time bank-to-bank transactions with a higher transaction limit, while UPI Lite is designed for small-value transactions, allowing offline payments without entering a PIN.

UPI vs UPI Lite

Closing Thoughts

UPI Lite offers a hassle-free solution for quick, small payments, especially when internet access is limited. It simplifies everyday transactions, making them faster and more convenient. With no PIN needed for small payments and no extra charges, it's a great choice for everyday purchases. As it continues to grow, UPI Lite could become a go-to for many looking to streamline their payment process.

Frequently Asked Questions (FAQs)

1. Which bank introduced UPI Lite?

   UPI Lite is a new feature in digital payments that was launched by the Reserve Bank of India, working together with the National Payments Corporation of India.

2. Can UPI Lite be used without the internet?

   Yes, UPI Lite can be used without the internet for transactions under Rs. 500. These transactions can be done offline. However, you will need an internet connection to add money to your UPI Lite account from your bank account.

3. Is there a daily limit for UPI transactions?

   The standard limit for UPI transactions is Rs. 1 lakh per day. However, if you are making payments for bills or services from merchants, the limit can go up to Rs. 5 lakh.

4. Is UPI Lite safe to use?

   Yes, UPI Lite is designed with strong security features to keep your transactions safe. One of these features is device binding, which ensures that your UPI Lite account can only be accessed from the device it’s linked to, adding an extra layer of protection.

5. Can I create multiple UPI Lite accounts?

   You can only create one UPI Lite account on Google Pay, but you can have different UPI Lite accounts on other platforms if you wish.

6. How many transactions can I make with UPI Lite?

   There is no limit to the number of transactions you can make through UPI Lite. You can carry out unlimited transactions, and no internet connection or PIN is required for them.

7. Can I view my UPI Lite transaction history in my bank passbook?

   No, UPI Lite transactions won't appear in your bank passbook. Instead, you will receive daily SMS updates on your registered phone number detailing all your UPI Lite transactions.

8. Does UPI Lite charge fees for transactions?

   No, using UPI Lite is completely free. You won’t have to pay any extra charges for making transfers using the service.

9. Can I use UPI Lite as soon as I enable it?

   Yes, once you activate UPI Lite on your phone using the BHIM app, you can start transferring funds right away.

10. What happens if my UPI Lite account is disabled?

    If your UPI Lite account gets disabled, any refunds or transactions will show up in your linked bank account, but nothing will be visible in the UPI Lite app.

11. How does UPI Lite confirm users before a transaction?

    UPI Lite uses biometric authentication, like your fingerprint, to confirm your identity before each transaction. Since there's no PIN required, this fingerprint check ensures only you can access your UPI Lite account for payments.