In a world where digital payments are becoming increasingly popular, the need to develop more efficient methods of financial transactions is becoming more evident. UPI Lite, a new payment system developed by the National Payments Corporation of India (NPCI), is designed to reduce the burden on bank systems by providing a faster and more secure platform for money transfers.
This article will provide a brief overview of UPI Lite and how it can help reduce the load on bank systems.
What is UPI Lite?
UPI Lite is a simplified version of the existing UPI system that allows digital payment transactions without logging into a bank account. It is a mobile wallet that enables users to make real-time small-value payments without providing a UPI PIN, allowing transactions to be completed quickly and securely.
UPI Lite can be used by individuals, merchants, and other organizations. UPI Lite is primarily aimed at people who prefer to avoid using digital payments. It will help attract more customers to the digital payment system and make digital payment processes more efficient.
It will make it easier for first-time users to get started with digital payments quickly by letting them complete their transactions with just a few clicks. It will also help merchants and organizations reduce their cash handling and enable them to receive customer payments more quickly. It will also help reduce the load on the banks by reducing the number of transactions that need to be processed through the banks.
How secure is UPI Lite?
The ease of UPI Lite will not come at the cost of security. UPI Lite transactions do not require a PIN because they are designed to facilitate low-value transactions. Similar to debit and credit cards, PINs are not required for small-ticket transactions to make the process more convenient.
However, UPI Lite is secure. The BHIM App requires you to enter a passcode before accessing any part or feature of the app, ensuring that your transactions are protected.
What was the need to introduce UPI Lite?
Within the first year of its launch, the UPI received a total of 160 million transactions worth a total of INR 1.3 trillion. However, it became evident that the existing system had certain limitations. UPI Lite has been designed to address these limitations and make it easier for people to use digital payments.
UPI (Unified Payments Interface) Lite is a simpler version of the UPI system that was designed for people who have limited internet connectivity or low-end smartphones. It was developed to provide a more efficient and streamlined way to make digital payments, as the full version of UPI requires a more powerful smartphone and a stronger internet connection. UPI Lite is easier to use and requires fewer resources, making it more accessible to a broader range of users.
Benefits of UPI Lite
Several benefits come with UPI Lite. Some of them are listed below:
– UPI Lite is a simplified version of UPI and can be used by anyone with a smartphone. This means that it can be used by customers who are less comfortable with digital payments.
– An on-device wallet feature, UPI Lite allows transactions up to Rs 200.
– It facilitates faster and easier money transfers as it does not require a customer to enter a UPI PIN.
– Users can make UPI transactions even without the internet.
– Up to Rs 2,000 can be added to the UPI Lite app balance.
– Users can fund UPI Lite using their bank account.
– It does not charge a transaction fee, making it more attractive for customers using digital payments for the first time.
How does UPI Lite work?
To use UPI Lite, users must first add funds from their bank account to the wallet on the UPI Lite app. Once the funds are added to the wallet, the pre-loaded funds can be used to make payments through UPI Lite without the need for an internet connection. UPI Lite operates as an “on-device wallet,” so users do not have to enter their UPI PIN for transactions.
As the digital payment industry grows in India, the need for better and more efficient ways to complete transactions is becoming more critical. According to the NPCI, 50% of UPI transactions in India now have a value of less than Rs. 200. Here, UPI Lite will provide users with a convenient way for simpler and faster low-value transactions. With the use of UPI Lite, the burden on the core banking system for processing debit transactions is reduced, leading to an even higher success rate for transactions.
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