UPI Lite – An Initiative towards De-cluttering the e-payment Congestion

UPI Lite

The growth of the digital payments industry in India has been commendable. Various digital products and emerging use cases such as UPI solutions, NETC Fastag, digital wallets, etc. continue to make inroads and garner the support of the Indian customers.

UPI is one of the popular online payment platforms that continue to dominate the digital payment space in the country. According to the latest reports, UPI holds 96.5 percent market share in overall mobile payments and 56 percent (volume-wise) in person-to-merchant payments. Factors like convenience, faster transactions and practical security features, have made UPI payment a preferred choice of many.

Whether it’s about paying utility bills, mobile phone bills or buying goods on e-commerce platforms, the UPI platform has turned into a preferred payment method for the consumers. According to the National Payments Corporation of India (NPCI) in April 2022, the UPI achieved a significant milestone, processing over 5.5 billion transactions.

Understanding the concept of the UPI Lite 

The immense popularity and faster adoption of UPI payments have put a significant burden on bank’score systems. To ease the load on the bank’s core system, NPCI has launched a new product on UPI rails called UPI Lite, that will process low-value transactions (below INR 200) without routing them to the bank’s core system, such low-value transaction today contributes to more than 50% of total volume processed.

  • UPI Lite is designed as an ‘on-device wallet’ for processing low-value transactions. It will initially target transactions of ₹200 or less.
  • All the users of UPI will have the option to enable UPI Lite called “On-Device wallet” on their UPI app itself.
  • The users will have to allocate funds from their bank accounts to the app. The UPI Lite balance limit is set at ₹2,000.
  • While UPI Lite low-value payments will process without the additional factor authentication (AFA), to top up funds in UPI Lite users will need to enter AFA or use UPI AutoPay.
  • Unlike 123Pay or USSD-based UPI services that also enable transactions without internet for feature phones, UPI Lite on the other hand will allow using scan and pay on smartphones without internet.

As per NCPI, UPI Lite will be launched as a pilot project with selected banks and app providers but will later launch across banks & PSP.

Mindgate has been at the forefront with significant contributions to the field of digital transaction ecosystem. Building new generation digital payment platforms, Mindgate solutions including UPI products aim to offer the best breed of digital services to banks, financial institutions and corporations.

The vast experience of Mindgate on UPI platforms enables us to develop better and smarter UPI on-device products like the UPI Lite. This latest addition will not only ease out the functioning of banks and institutions but also offer better payment alternatives to today’s consumers.