No pin needed: RBI raises payment limit on UPI lite from Rs 200 to Rs 500

New Delhi, Aug 10, 2023 

The overall limit is, however, retained at Rs 2000 to contain the risks associated with relaxation of two-factor authentication.

To encourage wider adoption of the offline mode of payments and to bring in more use cases, the Reserve Bank of India has now proposed to increase the per transaction limit on UPI Lite to Rs 500 from the current Rs 200.

UPI Lite is meant to enable users to conduct small-value transactions seamlessly without facing banks' occasional processing failures. It was introduced by the National Payments Corporation of India (NPCI) and RBI in September 2022, and is a simplified version of the original UPI payment system.

"By removing the need for two-factor authentication for small value transactions, these channels enable faster, reliable, and contactless mode of payments for everyday small value payments, transit payments etc. Since then, there have been demands for enhancing these limits," said the RBI in a statement.

The overall limit is, however, retained at Rs 2000 to contain the risks associated with relaxation of two-factor authentication.

The on-device UPI Lite wallet has gained traction in the last one year and currently processes more than ten million transactions a month.

"To promote the use of UPI-Lite, it is proposed to facilitate offline transaction using Near Field Communication (NFC) technology. This feature will not only enable retail digital payments in situations where internet / telecom connectivity is weak or not available, it will also ensure speed, with minimal transaction declines. Instructions to NPCI will be issued shortly," said the RBI.

Users must download a UPI Lite-enabled app, such as BHIM, Google Pay, PhonePe, Paytm, etc. Once the app is installed, users can create a UPI Lite ID and add money to their UPI Lite balance.

[The Business Standard]