Do you know what UPI Lite is and how to activate it in Paytm and other UPI apps?

In September 2022, RBI introduced ‘UPI Lite’ to make quick and easy low-value payments. The use of UPI in online payments is increasing with each passing month and year. In the month of December 2022 alone, India completed over 7.82 billion UPI transactions. However, small value transactions form the bulk of UPI payments. Therefore, to address issues like failed payments, to make low-value UPI transactions reliable and convenient, NPCI has introduced a device wallet feature called UPI Lite. Today we will discuss in detail what is UPI Lite and how it is set up and used in a smartphone?

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UPI Lite in India, detailed information

What is UPI Lite?

UPI Lite is an on-device wallet that makes it easy to make payments worth Rs 200 or less without entering your UPI PIN. It is prepared by NPCI (National Payments Corporation of India). According to NPCI, around 50% of UPI transactions are below Rs 200 and around 75% of retail transactions are below Rs 100.

Since UPI has more low-value payments, NPCI has come up with a UPI Wallet feature that can specifically handle transactions below Rs.200. , Hence, even during peak UPI load, UPI Lite will work seamlessly as it is an on-device wallet and does not depend entirely on the UPI infrastructure.

The best part about UPI Lite is that you can scan all UPI QR codes to make payments and send money to your VPA or UPI ID, phone numbers and bank accounts. However, you can make payments up to Rs.200 only with UPI Lite. You also have the option to deposit money into the wallet using UPI and store up to Rs 2000 in the wallet.
Additionally, UPI Lite will ensure that your bank account details are not cluttered with low-value UPI transactions. All your UPI Lite transactions will be available in the app you are using.

One of the most popular features of UPI Lite is the offline payment mode. However, it looks like the feature is yet to be rolled out on BHIM or Paytm. Also there is very little information about how offline payment mode works and the NPCI website (visit) does not mention anything about offline payment mode.

Key Features of UPI Lite

• With UPI Lite, you can make payments up to Rs.200 only. You will not be required to enter your UPI PIN for payments below Rs.200.
• You can deposit up to Rs.2000 in your UPI Lite wallet. Money can be deposited through UPI account only. This cannot be done with a credit or debit card.
• All merchants can make payments to all UPI QR codes from UPI ID, phone number and bank accounts.
• The money will be deposited directly into the recipient’s bank account. It will not be credited to UPI Lite Wallet.
• UPI Lite will work even when regular UPI payments fail due to peak load. It does not depend on the UPI infrastructure to perform wallet transactions.
• UPI Lite keeps your account statement clean. All your UPI Lite transactions are visible only in the app and not in your bank statement.
• You can use UPI Lite for only one bank account in one app. You cannot have multiple UPI Lite wallets in the same app.
• You can withdraw your money from your UPI Lite account whenever you want and without any charges.

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How does UPI Lite work?

UPI Lite works in the same way as the wallet. Simply activate UPI Lite in any of the supported apps and deposit money (up to Rs.2000) through your UPI account. Once the money is deposited in the wallet, you can scan any QR code or enter a phone number and make payments for amounts less than Rs.200 without requiring a PIN.
The money will be sent directly to the user’s UPI account and this is also the main difference between regular wallet and UPI Lite wallet. This is done to ease the pressure on the CBS (Core Banking System) of banks during peak UPI load, which can be used to carry out high value transactions.

How to use UPI Lite in Paytm?

To set up and use UPI Lite, follow the steps below and you’ll have UPI Lite ready to use in minutes.

stage 1- To use UPI Lite, you must first install the Paytm app if it is not already installed on your smartphone.

Step 2- Then open the app and tap on “Balance & History (Passbook)”.

Step 3- You will see the new UPI Lite option at the top. On the right side of the option you will see an inscription “Activate”, tap on it.

Step 4- Then select the bank which supports UPI Lite on Paytm and if you want to use another bank account for this process you can also enter another bank account in it then press “Next”.

Step 5- On the next page, enter a small amount and tap on ‘Add Money to UPI Lite’.

Step 6- Note that money will be debited only through UPI supported account and you can deposit up to Rs.2000 in it. Now enter the UPI PIN and UPI Lite will be activated instantly.

Step 7- Now scan any QR code and you can pay upto Rs.200 through UPI Lite Wallet without need of UPI PIN.

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How to use UPI Lite in BHIM app?

Apart from Paytm, you can also use UPI Lite on the BHIM app.

stage 1- Open the BHIM app and scroll through the carousel at the top to go to the UPI Lite feature. Now click on “activate now” in the carousel.

Step 2- You will now be given information about the feature. Click Next a few times, then agree to the terms and conditions and tap the Activate Now button at the bottom.

Step 3- The BHIM app will then ask you to load money into the wallet. As mentioned above, you can only add money from supported banks.

Step 4- To start UPI Lite, enter any small amount, select the bank account and tap on “Activate UPI Lite” to enter your UPI PIN. You will see a confirmation message for the same.

Step 5- Finally, you can go to the ‘Bank Accounts’ section and see the UPI Lite Wallet details here. Also, the BHIM app will display your UPI Lite balance on the top right corner of the home screen.

Which banks support UPI Lite?

While UPI is supported by over 250 banks, UPI Lite is currently available for only nine banks. The list of supported banks will expand in the future, but for now the list of UPI Lite supported banks is given below:

• Canara Bank
• Central Bank of India
• HDFC Bank
• Indian Bank
• Kotak Mahindra Bank
• Punjab National Bank
• State Bank of India
• Union Bank of India
• Utkarsh Small Finance Bank

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