UPI transactions have seen a steep rise in recent times, and the majority of these are small-ticket transactions. To address this growing demand, RBI had introduced UPI Lite in September 2022 to expedite and ease out payments which are of lower denomination in a quicker manner. Now, with the introduction of its offline payment addition – UPI Lite X, it has enhanced user experience a bit further.

According to NPCI (National Payments Corporation of India), which had conceptualized and developed UPI, majority of the transactions which amount to 50% of the total volume are of lower ticket size, and 75% of the retail transactions are below Rs.100. To increase the reliability and convenience of these transactions and cut out their failure rate, this innovative on-device wallet feature UPI Lite was introduced. It is built to transact small-value payments which are under Rs 200. The major advantage is that the payments can be initiated without entering the UPI Pin.

UPI Lite decreases the load on the UPI infrastructure and aims was to push seamless low-ticket transactions despite peak load. As UPI Lite is an on-device wallet and not entirely dependent on the UPI infrastructure, the chances of failed transactions are minimal. What’s interesting here is that it is packed with similar features as that of UPI, with the added benefit of minimal payment failures.

Users can scan and pay via all available UPI QR codes and send money to VPAs or UPI IDs, phone numbers, and bank accounts. Additionally, there is a option to add up to Rs 2000 to the wallet using UPI. This feature ensures that the bank account is free from the clutter that small value transactions bring as the payments are initiated directly via the wallet. The maximum daily transaction limit for UPI Lite is set at Rs 4,000.

UPI Lite Features

• Faster transactions: As there is no need to download a UPI-enabled app, the transaction speed is faster. Users can use UPI Lite on apps like Google Pay, PayTM, BHIM and PhonePe to make transactions.
• User-friendly interface: The user interface is simple and easy to use which makes it effortless to send and receive payments.
• High compatibility with banks: Transferring funds from any bank account is easy as UPI Lite is compatible with a number of banks.
• Zero transaction fees: There are no transaction fees which makes it very cost-effective for transferring funds online.
• Highly secure: Multi-factor authentication makes UPI Lite extremely secure, ensuring maximum user data and transaction protection. PIN-based authentication system is also embedded for added security.

UPI Lite X – How is it different from UPI & UPI Lite?

UPI Lite uses the NPCI Common Library (CL) app for low-value transactions. On the other hand, UPI is a 24x7 payment system that allows instant real-time money transfers between two bank accounts. While using UPI or UPI Lite, the recipients need not be physically present near each other and can accept or transfer funds from any location in the country. Scanning of QR code or using the recipient's UPI ID or linked phone number is sufficient to carry out the transactions.

UPI Lite X transactions on the other hand are made via Near Field Communication (NFC) which transfers money between on-device wallets, without the need for internet access. Users can initiate transactions even in areas with poor connectivity or zero connectivity as it does not rely on the internet to send and receive payments which is one of its major advantages.

These innovative UPI payment systems are a movement towards a more secure financial future which is accessible and efficient at the same time. Owing to their user-centric approach and vast advantages, the potential is huge in the country’s digital payment realm. As the need for UPI transactions rise, instant payment systems like UPI Lite and UPI Lite X are bound to give a big boost to the online transaction space.