RBI Raises UPI Lite Daily Transaction Limit To INR 500

SUMMARY

The move is aimed at encouraging people to use the UPI Lite feature, RBI Governor Shaktikanta Das said

The central bank has also proposed UPI payments via NFC technology to enable more digital transactions via UPI Lite in areas with feeble network connectivity

Major UPI platforms like Paytm, PhonePe and Google Pay currently offer the UPI Lite feature

The Reserve Bank of India (RBI) has increased the per transaction limit for UPI Lite to INR 500 from INR 200.

Commenting on the development, RBI Governor Shaktikanta Das said that the initiative is aimed at encouraging people to use the UPI Lite feature and also enhance their digital payments experience.

“With the objective of harnessing the new technologies for enhancing digital payments experience for users it is proposed to… enhance the transaction limit of small value digital payments in offline mode to INR 500 from INR 200 within the overall limit of INR 2,000 per payment instrument,” Das said.

Explaining the reasons behind the move, the RBI said that removing the need for two-factor authentication for small-value transactions will enable faster, more reliable and contactless payments.

The central bank has also proposed UPI payments via Near Field Communication (NFC) technology, which will enable digital transactions via UPI Lite in areas with feeble network connectivity. It will also ensure speed, with minimal transaction declines.

In addition, the RBI is also considering the launch of a conversational payment feature through which users will be able to chat with an AI bot to conduct a complete transaction. “This channel will be made available in both smartphones and feature phones-based UPI channels, thereby helping in the deepening of digital penetration in the country,” the RBI said.

UPI Lite allows users to add money from their bank accounts to their wallets and make transactions without a pin with a overall limit of INR 2,000.

Currently, UPI Lite is available on Paytm, PhonePe and Google Pay. While Paytm was the first fintech app to roll out the feature, PhonePe introduced the feature in May this year. Google Pay launched UPI Lite in July.

The number of UPI transactions edged closer to the 1,000 Cr mark in the month of July. The digital payments network processed 966 Cr transactions worth INR 15.34 Lakh Cr during the month. The move to further increase penetration is in line with UPI aiming to process 1 Bn transactions daily, a number which stood at more than 311 Mn transactions per day in July.

Update: The copy has been edited to remove the word daily from headline and the story. The error is regretted.