RBI proposes raising the UPI Lite transaction limit to Rs 500 for smoother small-value payments, reducing authentication for speed. NFC tech enables offline payments, addressing weak connectivity issues. UPI Lite, available on apps like BHIM, Google Pay, and PhonePe, eases transactions for everyday needs, now with enhanced usability.
The Reserve Bank of India (RBI) aims to boost the adoption of offline payments and broaden its applications by proposing an increase in the per-transaction limit for UPI Lite. The current limit of Rs 200 will be raised to Rs 500. UPI Lite, introduced in September 2022 by the National Payments Corporation of India (NPCI) and RBI, streamlines small-value transactions, bypassing the occasional processing hiccups experienced with traditional banking methods.
This simplified iteration of the original UPI payment system facilitates swift and dependable contactless payments for everyday needs, transit fares, and more. As a result, there’s been a growing call for elevating these transaction limits, according to the RBI’s official statement. Nevertheless, the overall ceiling remains at Rs 2000 to mitigate potential risks associated with reduced two-factor authentication.
In the past year, the on-device UPI Lite wallet has gained considerable traction, efficiently processing over ten million transactions monthly. To further encourage the use of UPI Lite, the RBI proposes the integration of Near Field Communication (NFC) technology for offline transactions. This innovation not only empowers retail digital payments in low or no internet/telecom connectivity scenarios but also guarantees speedy transactions with minimal declines.
The RBI will soon issue directives to the NPCI to implement this feature. Users can readily participate by downloading a UPI Lite-enabled app like BHIM, Google Pay, PhonePe, or Paytm. Once the app is installed, creating a UPI Lite ID and adding funds to the UPI Lite balance becomes a straightforward process.
