UPI (Unified Payments Interface) and UPI Lite are two different versions of the same payment system used for digital transactions in India. UPI is a real-time payment system developed by the National Payments Corporation of India (NPCI) that enables users to instantly transfer money between bank accounts using a mobile device.
On the other hand, UPI Lite is a simplified version of UPI designed for small-value transactions. With UPI Lite, you can make transactions up to Rs 500 per transaction, and you can add up to Rs 4000 in a day.
UPI vs UPI Lite: Top 6 Differences to Know
| Particulars | UPI | UPI Lite |
|---|---|---|
| Product | 24×7 payment system for real-time money transfers | On-device wallet for real-time transactions |
| Transaction Limit | Up to Rs. 1 Lakhs per day, 20 transactions per day | Up to Rs. 4000 per day, Rs. 500 per transaction |
| Fund Transfer | Send and receive money using bank accounts | Only supports sending money, credits/refunds to bank account |
| Use of PIN | Requires PIN for every transaction for added security | No PIN required for transactions |
| Transaction History | Recorded in bank passbook and payment app’s history section | Transaction records available in the app (Paytm app) and through daily SMS |
| Availability | Supported by over 300 banks and major payment apps | Supported by 9 banks (Paytm, BHIM, and more) |
It’s important to note that UPI Lite currently supports only sending money and does not allow receiving funds directly into the UPI Lite account. Any credits or refunds are directly made to the user’s linked bank account. Additionally, UPI Lite is supported by a limited number of banks (9) and is available on select payment apps such as Paytm and BHIM
What is UPI Lite?
UPI Lite is a simplified version of the Unified Payments Interface (UPI) system in India. It acts as an on-device wallet for small-value transactions. You can add funds to your UPI Lite from any linked bank account.
With UPI Lite, you can make transactions up to Rs 500 per transaction. In a day, you can add a total of Rs 4000 to your UPI Lite account. However, note that the UPI Lite app can only hold a maximum of Rs 2000 at a time.
For example, if you have Rs 2000 in your UPI Lite app, you can make multiple transactions until you have used up the entire amount. You can make 4 transactions worth Rs 500 each, or 5 transactions worth Rs 400 each, and so on. If you need to make more transactions on the same day, simply add another Rs 2000 to your UPI Lite account.
The advantage of UPI Lite is that it speeds up transactions by not requiring a 4 or 6-digit PIN for each payment. This makes it more convenient for quick and hassle-free transactions.
- How UPI Lite works: UPI Lite allows users to add money to their UPI Lite account from their linked bank account. Once the money is added, users can make transactions of up to Rs. 500 using the balance in their UPI Lite account. Users can add up to Rs. 2,000 twice a day to their UPI Lite account, giving them a total daily usage limit of up to Rs. 4,000.
- Transaction limit: With UPI Lite, you can make real-time transactions of up to Rs. 500. The maximum amount you can keep in your UPI Lite account at any time is Rs. 2,000. However, you can add up to Rs. 2,000 twice a day, which means you can reach a maximum daily limit of Rs. 4,000.
- Fund credit: Currently, you can use UPI Lite to make payments, and the amount will be directly transferred to your bank account for credit and refunds.
- Viewing UPI Lite transaction history: The payment app will show the transfer of funds between your linked bank account and UPI Lite account in the transaction history. Additionally, you will receive a daily SMS statement summarizing all the UPI Lite transactions you made during the day.
Important: Lite users have the flexibility to close their account or transfer funds from their Lite account to their bank account effortlessly and without any fees by simply clicking a single button.
What’s new?
UPI LITE X is a new feature introduced by RBI governor Shaktikanta Das on September 07, 2023. It allows users to make transactions even without network connectivity. This means you can send and receive money in places where there is no internet, like underground stations or remote areas. UPI LITE X works on devices that support NFC technology. To use UPI LITE X, both the sender and receiver need to have UPI LITE X offline enabled. The maximum transaction limit is ₹500. Payments are made directly between the payer and the payee’s UPI LITE X accounts. UPI LITE X currently works only on Android mobile devices. It uses NFC technology to enable quick and convenient transactions between on-device wallets.
What is UPI?
UPI, or Unified Payments Interface, is a real-time payment system developed by the National Payments Corporation of India (NPCI). It enables users to instantly transfer funds between different bank accounts through their mobile phones. UPI allows individuals to link multiple bank accounts to a single mobile application, making it convenient to make payments, send money, and perform various financial transactions. It provides a seamless and secure platform for person-to-person payments, merchant payments, bill payments, and more, all easily using a mobile device.
When it comes to the number of transactions, users can conduct up to 20 UPI transactions within 24 hours, once the daily transaction limit is reached. However, it is important to note that specific transaction limits may vary across different banks.
As for the daily limit, the NPCI has set a maximum transaction limit of Rs. 1 lakh per day for UPI transactions. This means that the total value of all UPI transactions initiated by a user in a day cannot exceed Rs. 1 lakh.
“As of now, the National Payments Council of India (NPCI) has set the UPI transaction limit at ₹1 lakh per day”
To transfer money through UPI, you’ll need a smartphone with a reliable UPI app like Paytm, and a VPA ID or UPI ID. This UPI ID allows for real-time fund transfers using different methods like bank account details, mobile numbers, or scanning QR codes.
- How UPI works: To initiate transactions through UPI, you’ll need a UPI application like Paytm. Once you open the app, you can enter the recipient’s mobile number, UPI ID, or scan their QR code. After providing the necessary details, specify the amount and select a payment option to complete the transaction successfully.
- Transaction limit: Currently, the maximum limit for fund transfers in UPI is set at Rs 1 lakh, ensuring secure and convenient transfers of higher amounts. However, for certain P2M (Person to Merchant) transactions such as loan repayments, credit card payments transactions related to capital markets, the limit is increased to ₹2 lakhs. Moreover, payments to educational institutions and healthcare have a higher limit of ₹5 lakhs.
- Transfer Funds: UPI offers various methods to send or receive money effortlessly. You can use a mobile number or choose to use your UPI ID or bank details to facilitate transactions. This flexibility allows you to transfer funds according to your preferences and convenience.
- Viewing UPI transaction history: You can easily access your transaction history within the UPI-supported app on your smartphone. By navigating to the “transaction history” tab, you can conveniently review your past UPI transactions and stay informed about your financial activities.
UPI (Unified Payments Interface) and UPI Lite are two versions of a digital payment system introduced by the National Payments Corporation of India (NPCI). UPI offers a comprehensive platform for transactions up to ₹1 lakh per day, allowing users to make payments, send money, and perform various financial activities. UPI Lite, on the other hand, is a simplified version designed specifically for small-value transactions, with a lower transaction limit of ₹4,000 in total daily and ₹500 per transaction. Both UPI and UPI Lite provide instant and secure fund transfers through mobile numbers, UPI IDs, or QR codes, offering convenient alternatives to cash transactions and promoting a cashless economy.
