The RBI launched the UPI Lite service to boost digital payments. In September 2022, UPI Lite was introduced to streamline the UPI transaction procedure.
Platforms like PhonePe and Paytm have launched this service to date. Most of the cities around the nation use UPI for payment. Additionally, small to large vendors use UPI. However, 50 percent of all UPI transactions nationwide have a value of Rs 200 or less, according to the NPC I circular published in May 2022. Because of this, payments frequently become stuck due to increased traffic. In addition, other procedures, such as adding the PIN to UPI, take time.
UPI Lite was established to enable quick payments and lessen traffic in banks. The BHIM app already permits UPI Lite transactions. In parallel, Paytm has made history by being the first digital payment app to introduce UPI Lite on its platform.
What is UPI Lite?
Users using UPI Lite can conduct transactions without a linked bank account using an "on-device" wallet. This means you can pay as fast as possible by utilizing the wallet alone, without going via the bank. You must, however, put money in the wallet.
How much can be paid?
Users of UPI Lite Wallet will be able to make immediate transactions up to Rs. 200 once this feature is set up. You can easily transfer this money to another person without inputting the UPI PIN or confirming the transaction. However, users may only add Rs 2,000 to UPI Lite twice daily. In other words, Rs. 4000 is usable every day.
Benefits of UPI Lite.
Fraud is less likely to occur while using UPI Lite since transactions are limited in scope. Banks don't need to be concerned about daily transaction restrictions when making inexpensive UPI payments. Low-cost UPI transactions are made easier via UPI Lite. Additionally, users can freely and at any moment transfer their UPI balance back to the same bank account.
How will Paytm users be able to set up?
>> Open the Paytm app on your smartphone to configure UPI Lite.
>> Then click the "Profile" icon on the main page's top left corner.
>> Select "UPI & Payment Settings" at this point, and then click "UPI Lite" under the "Other Settings" section.
>> Select the UPI Lite-eligible account from the list now.
>> To make it active, provide balance. You can now utilize it.