In its latest Monetary Policy Committee (MPC) meeting, the Reserve Bank of India (RBI) announced significant updates to its UPI Lite payment system. The central bank has increased the per-transaction limit for UPI Lite from Rs 500 to Rs 1,000 and also raised the wallet limit from Rs 2,000 to Rs 5,000. These changes aim to simplify small digital transactions, making them faster and more convenient for users.
New Transaction Limits for UPI Lite
UPI Lite is designed to make low-value transactions smoother, as users can make payments without needing to enter their UPI PIN. Initially, UPI Lite was restricted to transactions of up to Rs 500, but with the new RBI guidelines, users can now perform transactions of up to Rs 1,000 per payment without PIN entry. This will facilitate easier daily transactions, such as paying for groceries or transport, without the hassle of constantly verifying each payment.
One of the key features of UPI Lite is that small transactions won’t clutter the user’s bank account statements. These payments are processed quickly, reducing the chances of payment failures, while maintaining a clear transaction history within the UPI app itself. This makes it a great option for people who make frequent low-value transactions.
UPI Lite Wallet Now Holds Rs 5,000
In addition to increasing the transaction limit, the RBI has raised the wallet limit for UPI Lite from Rs 2,000 to Rs 5,000. This allows users to store a larger balance in their UPI Lite wallet, making it easier to handle multiple small transactions without constantly reloading the wallet.
Popular apps such as BHIM, Google Pay, and PhonePe allow users to top up their UPI Lite wallets. Now, users can keep up to Rs 5,000 in their wallets, which provides more flexibility for handling multiple transactions efficiently without entering a PIN each time.
UPI 123PAY Transaction Limit Increased to Rs 10,000
The UPI 123PAY system, which enables feature phone users to make UPI payments, has also seen an increase in its transaction limit. Previously, users could only make transactions of up to Rs 5,000, but the RBI has now doubled this limit to Rs 10,000 per transaction. This change is expected to improve the accessibility of digital payments for those who don’t have smartphones or internet access, a key demographic in rural and underserved areas.
What is UPI Lite?
UPI Lite is a streamlined version of UPI, designed for smaller transactions without requiring the input of a PIN for each transaction. The goal of UPI Lite is to enable users to make faster, hassle-free payments. While users initially could only perform transactions of up to Rs 500, the recent RBI hike allows for payments of up to Rs 1,000. UPI Lite transactions also do not appear in bank passbooks, helping users keep their statements uncluttered. However, full details of these transactions can be seen in the UPI app.
New Auto-Top-Up Feature for UPI Lite
To further simplify UPI Lite usage, the National Payments Corporation of India (NPCI) has introduced an auto-top-up feature. This will allow UPI Lite wallets to be automatically replenished when the balance falls below a certain limit, as chosen by the user. However, the wallet balance will still be capped at Rs 5,000 at any point. Users can manage their auto-top-up mandates directly in the UPI apps, and this feature is set to go live across platforms by October 31, 2024.
UPI 123PAY for Feature Phone Users
UPI 123PAY was launched to enable users without smartphones to access UPI-based digital payment services. This system has now expanded with an increased per-transaction limit of Rs 10,000, allowing feature phone users to handle larger payments. UPI 123PAY is available in 12 Indian languages, making it accessible to a broad user base.
There are four methods through which users can make payments using UPI 123PAY:
- Pre-defined Interactive Voice Response (IVR) number
- Missed call payments
- OEM-enabled payments
- Sound-based technology
These payment methods allow feature phone users to conduct transactions without requiring an internet connection, enhancing financial inclusion for millions across the country.
The Road Ahead for UPI
With these updates, the RBI aims to boost the adoption of digital payments and extend the benefits of UPI to more people, including those in rural or underserved areas. The increased limits for UPI Lite and UPI 123PAY are expected to simplify everyday payments, making UPI an even more indispensable part of India’s digital payment ecosystem.
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