PhonePe launches UPI Lite for smaller transactions: How to use
Two months after Paytm launched UPI (Unified Payments Interface) Lite, rival PhonePe has made the feature available on its platform. Announced in September 2022 by the Reserve Bank of India (RBI), UPI Lite is aimed at making small-ticket transactions reliable and convenient. Let's take a look at what UPI Lite is and how you can use it on PhonePe.
What is UPI Lite?
Like UPI, UPI Lite is also powered by the National Payments Corporation of India (NPCI). Unlike UPI, however, UPI Lite is only for transactions up to Rs. 200. The new feature uses an on-device wallet to complete transactions instead of customers' banks. This eliminates the need for entering a UPI pin. It also reduces the scope for payment failures.
KYC authentication is not required for activating UPI Lite
PhonePe's UPI Lite will allow users to make payments of up to Rs. 200 with a single tap. Activating UPI Lite does not require KYC authentication. Users can tap the option to enable UPI Lite on the home screen. Then, enter the amount to be added and select the bank account. Next, enter the UPI pin to activate your Lite account.
Users can add up to Rs. 2,000 to Lite account
Users can add up to Rs. 2,000 to their Lite account. Paytm allows users to load up their Lite account twice a day with up to Rs. 2,000. It is unclear whether PhonePe offers the same. Users can make as many transactions within the maximum UPI Lite transaction limit. Users will get UPI Lite transaction history via SMS from their banks.
All major banks support UPI Lite: PhonePe
PhonePe has not said anything about banks that support UPI Lite on the app. According to the company, all major banks support the feature. On Paytm, nine banks support UPI Lite.
Why do we need UPI Lite?
High-volume, low-value payments form a major chunk of all UPI transactions. According to an NPCI circular released last year, 50% of UPI transactions are of Rs. 200 or less. With UPI Lite, the dependency of these transactions on the core UPI infrastructure will be almost null. This will make smaller transactions failproof and allow the UPI system to handle higher-value transactions efficiently.
UPI Lite paves way for UPI without network connectivity: PhonePe
"UPI Lite is a core part of the UPI stack offering, with a vision to enhance the users' digital payments experience for frequent and low-ticket size spends," PhonePe's CTO Rahul Chari said. "UPI Lite also paves the way to introduce use cases that need payment execution without network connectivity making it one of the most exciting launches from NPCI in recent times," he added.
