The RBI raised the transaction limit for offline digital payments via UPI Lite. Many people will benefit from the change, especially those who reside in places with poor internet connectivity. Since UPI Lite transactions occur offline, entering a UPI PIN is not required when making payments.

What is UPI Lite?

The goal of UPI Lite is to make it easier to make quick, low-value offline payments, which make up the great bulk of Indian retail transactions. Consumers can pay cashlessly for low-value purchases from Kirana stores, pharmacies, eateries, retail fuel stations, and other establishments by using their replenishable balance. Additionally, as LITE transactions won't be listed in the bank passbook, customers will appreciate a passbook that is less congested.

The initial framework, which was introduced in January 2022 and amended in August 2023, was intended to make small-value digital payments easier to conduct offline. UPI Lite enables low-value transactions to be completed without the need for internet connectivity, making payments faster and easier.

Two UPI Lite transaction limits raised

The RBI increased the per-transaction limit on UPI Lite from Rs 500 to Rs 1,000. The total wallet limit for UPI Lite has also been increased from Rs 2,000 to Rs 5,000.

What are the advantages of UPI Lite?

Customers benefit from UPI Lite's round-the-clock availability, improved small-value payment administration, and ease of tracking. UPI Lite allows for single-click payments, and users can regulate their spending with daily limitations, eliminating the need to hide the UPI Pin in crowded settings for small-value purchases.

An important step towards establishing a more egalitarian digital payment environment has been taken by the Reserve Bank of India with its decision to raise the UPI Lite wallet limit to ₹5,000 and the per-transaction limit to Rs 1,000.

“The Reserve Bank of India's decision to increase the UPI Lite wallet limit to ₹5,000 and enhance the per-transaction limit to Rs 1,000 marks a significant milestone in fostering a more inclusive digital payment ecosystem. This move directly addresses the needs of individuals in regions with inconsistent internet access by enabling faster, more convenient offline transactions, particularly for small-value payments,” said Dilip Modi, Founder, and CEO, Spice Money.

Mohan K, Founder, TechFini, says, "The RBI's decision to increase the UPI Lite wallet limit to Rs 5,000 and the transaction cap to Rs 1,000 is likely to benefit consumers by enhancing convenience, speed, and accessibility in digital payments. With a higher wallet limit, users can store more funds, reducing the need for frequent top-ups and making small-value transactions quicker and easier. The Rs 1,000 transaction cap allows for faster payments without extensive verification, benefiting both consumers and merchants by streamlining the process."

How to set up a UPI Lite account on Google Pay?

Step 1: Download and launch the Google Pay application. UPI Lite is a sub-category of the Google Pay app.

Step 2: At the top right, tap on your profile photo, then on the UPI Lite tab.

Step 3: Enter the amount you wish to add.

Step 4: Add up to Rs 5,000.

Step 5: Enter your UPI pin.

You can only have one UPI Lite account on Google Pay. Similarly, you can create UPI accounts on other applications like Paytm, PhonePe, etc.