HIGHLIGHTS
- UPI Lite will enable users to conduct microtransactions while offline.
- It will launch as an alternative to existing wallet applications such as Paytm and MobiKwik.
- The transaction amount will be restricted to Rs 200, while the on-device wallet storage will be limited to Rs 2,000.
UPI Lite will be released as an on-device wallet that will allow UPI users to perform microtransactions while offline. It will compete with PayTM, MobiKwik, and other digital wallets. According to a National Payments Corporation of India (NPCI) statement, the UPI Lite would initially allow users to perform transactions of less than Rs 200. This lighter version of the Unified Payments Interface (UPI) will also support small-value transactions in offline mode, as well as keeping money in wallets and other features. The UPI Lite will be built on the RBI's infrastructure to simplify small-value digital payments.
NPCI intends to reach the billion-a-day payment milestone within three to five years, and the launch of UPI Lite is considered to be important in that effort. Earlier this month, the RBI introduced the '123Pay' UPI service to facilitate payments for over 40 million feature phone users. According to NPCI data, UPI conducted 4.52 billion transactions worth Rs. 8,26,843 crore in February. Here's a short rundown of UPI Lite's main features:
UPI Lite features
According to the circular, the initial phase of UPI Lite would conduct transactions in a semi-offline mode, where a user will be able to debit the money offline and credit the sum online. Later, the user will be able to conduct transactions totally offline, with debit and credit cards processing without the need for an internet connection.
According to NPCI, the transaction would be restricted to Rs 200, and the on-device wallet capacity will not exceed Rs 2,000. However, the user must contribute funds to UPI Lite online using UPI AutoPay and two-factor authentication. Only in online mode will the user be able to enable, disable, and top up the UPI Lite. The UPI Lite balance will be displayed on the UPI app's home screen. Furthermore, the funds under UPI Lite will not yield interest.
While NPCI recommends that users have a password or other form of verification for security, the payment can be made without a UPI PIN. At regular intervals, users will get an aggregated debit SMS for each transaction. The user may have several UPI Lite on-device balances depending on how many UPI Apps he or she uses to access one specified bank account.
Finally, UPI Lite will begin as a trial programme with numerous applications and banks.
