What is UPI Lite?

UPI Lite is a simplified version of the Unified Payments Interface (UPI) that allows for faster and more convenient small transactions. Unlike traditional UPI transactions, which require two-factor authentication (2FA) for every payment, UPI Lite uses a single-factor authentication process, making it quicker and more efficient for small purchases.

Why would one need UPI Lite?

The increasing requirement for UPI Lite was on account of the increasing demand for faster and more convenient payment methods for small-value transactions. Traditionally, the 2FA process involved entering a PIN or biometric authentication, which is time-consuming, especially for frequent small purchases. UPI Lite addresses this issue by eliminating the need for 2FA for transactions up to a certain limit (currently ₹200).

Key Features of UPI Lite

• Faster Transactions: UPI Lite offers significantly faster transaction times compared to traditional UPI, as it eliminates the need for 2FA.
• Convenient for Small Purchases: It is ideal for small-value transactions like buying groceries, snacks, or commuting expenses.
• Secure: Despite the simplified authentication process, UPI Lite is still secure, as it uses dynamic linking and other security measures.
• Wide Acceptance: UPI Lite is supported by many banks and payment apps, making it widely accessible.

How Does UPI Lite Work?

1. Linking Bank Account: To use UPI Lite, you need to link your bank account to a UPI app.
2. Selecting Payee: Choose the recipient or merchant you want to pay.
3. Entering Amount: Input the transaction amount.
4. Authorizing Payment: Confirm the payment using a single-factor authentication method, such as a PIN or biometric authentication.

Benefits of UPI Lite

• Increased Convenience: UPI Lite offers a more seamless and convenient payment experience for small transactions.
• Reduced Transaction Time: Faster payments can enhance customer satisfaction and reduce waiting times.
• Boost to Digital Payments: UPI Lite can promote the adoption of digital payments, leading to a more cashless economy.