UPI Lite / UPI Lite

UPI Lite is a feature introduced to facilitate offline small-value digital payments without straining the core banking network. Launched in 2022 as an on-device wallet within UPI apps, UPI Lite allows users to make frequent low-value transactions without needing an active internet connection or UPI PIN for each transaction.

Users preload a small balance into the UPI Lite wallet from their bank account, up to a limit (initially ₹2,000). Payments made via UPI Lite deduct from this wallet balance, and the debits can occur offline; the confirmation is synced with the bank server when the device is back online.

Transaction Limits

UPI Lite was designed because about half of all UPI transactions are below ₹200. At launch, the per-transaction cap was ₹200, meaning each individual payment via UPI Lite could not exceed ₹200.

This cap ensures UPI Lite is used for small purchases like transit fares, coffee, grocery items, etc. To encourage wider adoption, the Reserve Bank of India later increased the single transaction limit to ₹500 in 2023.

However, the overall wallet balance limit remained ₹2,000 (i.e. users can hold up to ₹2,000 at a time in the Lite wallet). UPI Lite transactions do not require a UPI PIN at the time of payment, making them faster for small purchases. Security is maintained by requiring the user to authenticate while loading money into the UPI Lite wallet (for example, using UPI PIN or device unlock), and thereafter small payments can be done with one tap.

Usage Scenario

UPI Lite is especially useful in areas or situations with poor connectivity, such as rural regions or crowded events, since payments can be completed offline.

For example, a commuter can pay for a bus ticket or a cup of tea via UPI Lite even if data connectivity is weak – the transaction will be processed instantly from the on-device balance and the record will update with the bank once online.

By offloading a large volume of tiny transactions from the main UPI network, UPI Lite also helps reduce stress on banking networks and ensures faster processing of larger transactions.