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UPI transaction limit increased: check new limit, how to pay using UPI Lite and more


The Reserve Bank of India (RBI) proposed on August 10 to increase the transaction limit of UPI Lite. The RBI proposed to increase the per transaction payment limit for UPI Lite in offline mode from Rs 200 to Rs 500, in a bid to bring more convenience to users and deepen the reach of digital payments in the country.

Currently, the Reserve Bank of India (RBI) prescribed a limit of Rs 200 per transaction and an overall limit of Rs 2,000 per payment instrument for small value digital payments in offline mode, including for National Common Mobility Card (NCMC) and UPI Lite.

However, the one-time transaction limit will soon be increased to ?500. The overall daily transaction limit has been maintained at ?2,000 to mitigate the risks associated with relaxing two-factor authentication.

“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 Rs 500 from Rs 200 within the overall limit of Rs 2,000 per payment instrument. These initiatives will further deepen the reach of digital payments in the country,” said RBI Governor Shaktikanta Das while announcing the decisions of the monetary policy committee meeting.

What is UPI Lite

UPI Lite is a simplified version of the original UPI payment system, introduced by the National Payments Corporation of India (NPCI) and RBI in September 2022. It is designed to facilitate hassle-free small-value transactions, reducing the impact of occasional processing failures faced by users during regular UPI transactions.

To achieve this, the government has eliminated the requirement to enter a UPI PIN during transactions using UPI Lite. By removing the need for two-factor authentication for small-value transactions, these channels further enable a faster, more reliable, and contactless mode of payment for everyday small-value transactions, transit payments, and more.

How to use UPI Lite

The UPI Lite feature is available in nearly all payment apps that support UPI payments, including Paytm, PhonePe, and Gpay. To enable this feature, navigate to the settings of these apps, locate the UPI Lite option, and activate the payment system.
To use UPI Lite:

  • Open UPI Lite-enabled app
  • Set your UPI Lite and link your bank account.
  • Add money to your UPI Lite wallet.
  • To make a payment, simply open the UPI payment app like you do in regular UPI payments.
  • Scan the receipts QR code or add a mobile number.
  • Enter the amount to be paid.
  • Select pay using UPI Lite.

RBI to add new UPI features

In addition to increasing the UPI Lite limit, the RBI is also planning to introduce new features to enhance the convenience and accessibility of UPI. One of these features is offline payments on UPI using near-field communication (NFC) technology through UPI Lite. This innovation will enable users to perform digital payments even in scenarios with limited or no internet connectivity.

Another notable feature is “Conversational Payments” on UPI. This will empower users to conduct payments through AI-powered conversation systems, leveraging platforms like online messaging or chat applications. This will further streamline the payment process, rendering it more efficient and user-friendly.

The initial implementation of “Conversational Payments” will support the Hindi and English languages, with plans for later expansion to include other Indian languages. The RBI will soon issue instructions to the National Payments Corporation of India (NPCI) for the rollout of this feature.

Published On:

Aug 10, 2023

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