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An improvised version for small value payments

An improvised version for small value payments

When e-payment systems were not there earlier, the transaction procedure could have been more extensive and manageable. National Payments Corporation of India (NPCI) developed Unified Payments Interface (UPI) for instant transactions to facilitate the payment system. UPI marked a revolution in digital payments. Nowadays, people are afraid to use net banking for online payments due to security concerns. Instead, they intend to opt for a more secure option. One of the significant benefits of UPI is that it promotes a cashless economy and remains active 24*7.


• UPI is a method that helps to transfer funds from one bank account to another with the help of a mobile app.
• Earlier, the upper limit of the transaction was Rs. 2 lakh, but as decided by the NPCI on 14th February 2020, the UPI upper limit has been amended. At present, the UPI transfer limit is Rs. 1 lakh.
• UPI app makes it mandatory to set a 4 to 6 digits PIN which you could use with every transaction.
• However, at times it becomes difficult for people to make any payment, even of smaller value, due to poor internet services, as people cannot make payments offline.


• To facilitate small-value payments without using a UPI PIN, the Reserve Bank of India (RBI) in September 2022 launched “UPI LITE.”
• UPI LITE is an “on-device wallet” feature allowing you to make real-time small-value payments. It enables instantaneous transactions with a single click.

How does it work?

• The method to operate UPI LITE is uncomplicated. At first, you have to add/load funds into the wallet on the app from your bank account.
• Then, the loaded funds can be used in transactions directly from the wallet up to Rs. 200 without using a PIN.
• You can add up to Rs 2000 to your UPI LITE mobile wallet.

Difference between UPI and UPI LITE:

• UPI is a method that helps transfer funds from one bank account to another with the help of the mobile app, whereas UPI LITE is a feature that allows small-value payments using the on-device wallet.
• UPI mandates setting a PIN of 4 to 6 digits, whereas UPI LITE does not make setting a PIN mandatory.
• One can quickly receive money through UPI, whereas, with UPI LITE, debit transactions are only possible. The bank account will receive a direct transfer of any funds credited to UPI LITE.
• One cannot operate UPI in an offline mode, whereas UPI LITE can be easily accessible even in an offline mode. Still, an internet connection should be there to load money into a wallet.
• The maximum transaction limit in UPI is Rs. 1 lakh (as decided by NPCI), and up to 20 transactions are allowed. Any transaction made after that would be chargeable. Whereas the upper limit in UPI LITE is Rs. 200, the total amount on-device wallet can be Rs. 2000.
• Customers of more than 100 banks are currently using UPI for making transactions via applications like BHIM, Google Pay, Paytm, PhonePe, etc. Whereas only the BHIM app is there, the UPI LITE feature and customers of 8 banks are using this facility.


UPI is considered the cheapest money transfer method and one of the most accessible and fast mediums. However, UPI LITE has improved the rate of successful transactions. According to the NCPI circular issued in May 2022, more than 50% of transactions were valued at Rs. 200 or less, making UPI LITE beneficial for customers.