UPI Lite Transaction Limits hiked to Rs 1,000 | UPI lite wallet limit to Rs 5,000

UPI Lite Transaction Limits hiked to Rs 1,000 | UPI lite wallet limit to Rs 5,000 | UPI123Pay limit also hiked:

The Reserve Bank of India (RBI) has announced a hike in the UPI lite per transaction limit to Rs 1,000 from Rs 500 currently. The central bank has also hiked the UPI lite wallet limit to Rs 5,000 from currently Rs 2,000.

The RBI also has hiked the UPI 123PAY per transaction limit to Rs 10,000 from Rs 5,000. The hike in transaction limits will help users make digital payments easier. The announcement was made in today's monetary policy meeting announcement.

The RBI governor said in his statement, "UPI has transformed India’s financial landscape by making digital payments accessible and inclusive through continuous innovation and adaptation.

To further encourage wider adoption of UPI and make it more inclusive, it has been decided to

(i) enhance the per-transaction limit in UPI123Pay from Rs 5,000 to Rs 10,000; and

(ii) increase the UPI Lite wallet limit from Rs 2,000 to Rs 5,000 and per-transaction limit from Rs 500 to Rs 1,000."

As per Statement on Development and Regulatory Policies, "In order to encourage wider adoption of UPI, it has been decided to enhance the limits for the following products of UPI:

i) UPI123Pay: UPI123 was launched in March 2022, with a view to enable feature-phone users to use UPI. This facility is now available in 12 languages. Currently, the per-transaction limit in UPI123Pay is capped at Rs 5000. In order to widen the use-cases, in consultation with the stakeholders, it has been decided to enhance the per-transaction limit to Rs 10,000. Necessary instructions will be issued to NPCI shortly.

ii) UPI Lite: A limit of Rs 500 per transaction and an overall limit of Rs 2000 per UPI Lite wallet, is presently applicable, with the facility of auto-replenishment. To widen the scope of usage of this product, it has now been decided to increase the UPI Lite wallet limit to Rs 5,000 and per-transaction limit to Rs 1,000. The framework for facilitating small value payments in offline digital mode, issued by the Reserve Bank, under which UPI Lite has been enabled, will be suitably amended."

Ramakrishnan Ramamurthy, Chief Delivery and Operations Officer – India, Worldline says, "Higher levels of commerce enablement are needed for last-mile coverage. To achieve this, the convenience of UPI 123 and UPI Lite has now gained wider reach and acceptance. Increasing the transaction limits is a positive initiative that will help enhance penetration from both transaction and value perspectives."

Rahul Jain – CFO, NTT DATA Payment Services India says, "Under-served categories such as senior citizens, and users from rural India with limited usage of digital means may find this beneficial. Enhanced limits can be particularly useful to make utility bill payments and for payments to other users. This welcome move from the RBI comes after the SEBI’s directive to allow UPI based block mechanism for funding secondary market trades in the capital market. Overall, the use-cases for UPI are increasing. This augurs well for both the consumer as well as for the industry, as payments become more efficient and convenient."

UPI lite helps individuals to make UPI payments without entering the UPI PIN to do the transactions. Currently, such UPI transactions can be done for up to Rs 500 per transaction. Going forward, an individual can make a UPI payment without a UPI PIN for up to Rs 1000 per transaction.

UPI lite helps in faster transaction processing, with lesser chance of failed UPI transactions. It also helps in reducing cluttering of bank passbooks with small value transactions. The transactions done via UPI Lite does not reflect in the individual's bank passbook. However, an individual can check their UPI app transaction history to check the UPI Lite transactions.

To use the UPI Lite facility, an individual is required to add the money in the UPI Lite wallet. This UPI Lite wallet is available on the UPI apps such as BHIM, Google Pay, PhonePe etc. An individual can add up to Rs 2,000 in the UPI lite wallet to make transactions without entering the UPI PIN. Now, an individual can add up to Rs 5,000 in the UPI lite wallet to make payments.

The National Payments Corporation of India (NPCI) has announced the auto-top up facility in the for the UPI Lite facility. Under the new feature, UPI Lite will be automatically reloaded by an amount chosen by the user whenever the UPI Lite balance falls below a minimum limit set by them. At any point, the UPI Lite balance limit must not exceed the specified limit of Rs 5000. An individual can revoke the auto-top up mandate any point of time. The new auto-top up facility must be enabled in the apps by October 31, 2024.

UPI 123PAY is a UPI payment facility for feature phone users i.e., who do not have smartphones to make usual UPI payments. Mehul Mistry, Global Head of Strategy, Digital Financial Services & Partnerships Wibmo says, " UPI 123Pay is designed to enable digital transactions for India’s 400 million feature phone users. It allows users to make UPI payments without needing a smartphone or an internet connection, making digital payments accessible to a wider population. To set up UPI 123Pay, users create a UPI ID on their feature phone by dialing *99#, selecting their bank, entering their debit card details, and setting a UPI PIN. This system allows secure transactions without internet access, supporting financial inclusion for those without smartphones."

There are four ways to make payment via UPI 123PAY. These are:
1. Pre-defined IVR number:
2. Missed call pay
3. OEM-enabled payments
4. Sound-based technology