UPI Lite Wallets To See Big Change Soon: Here's How You May Benefit

The Reserve Bank of India (RBI) has proposed to introduce auto-replenishment of UPI Lite wallets and bring the online transaction facility under the e-mandate framework. This means that UPI Lite wallets will soon get loaded automatically after the balance is exhausted.

The UPI Lite facility currently allows a customer to load his UPI Lite wallet up to Rs 2,000 and make payments up to Rs 500 from the wallet, said RBI Governor Shaktikanta Das during the central bank's policy meeting this morning.

"In order to enable the customers to use the UPI Lite seamlessly...it is proposed to bring UPI Lite within the ambit of the e-mandate framework by introducing an auto-replenishment facility for loading the UPI Lite wallet by the customer, if the balance goes below a threshold amount set by him/her," said Mr Das.

Since the funds remain with the customers, no additional authentication or pre-debit notification will be needed, he said. Guidelines in this regard will be issued soon, he added.

The RBI has also proposed to set up a Digital Payments Intelligence Platform that will use advanced technologies to mitigate payment fraud risks.

What is UPI Lite?

UPI Lite is an online payment system used by retail users for low-value transactions, like at grocery stores. Introduced in 2022, it aims to simplify regular transactions and minimise transaction failures. Users don't need a PIN for UPI Lite payments. There are no KYC requirements as well.

UPI Lite is linked to an online wallet, where the balance is treated as loose cash. Users need to have a balance in their UPI Lite wallets for executing a payment. At least 12 bank and payment apps support the UPI Lite mechanism, according to the National Payments Corporation of India.