What is UPI ?
UPI is Unified Payments Interface.
If you are in India, it is almost impossible for you to not know about UPI as it is the country’s ubiquitous payment mechanism for real time payments to merchants as well as friends and family using your smart phone
It is brainchild of NPCI, an organisation backed by government and banks which pioneered different payment mechanisms in India.
The main challenges for UPI are
To have internet to do a transaction
To have a smartphone
To enter PIN for every transaction even for a small transaction of 1 INR (0.012 USD)
UPI Lite tries to address the third challenge by making PIN optional for low value transactions of less than 200 INR (2.41 USD)
So, how exactly UPI Lite works ?
With UPI Lite, a wallet will be created in the UPI app. The wallet will be tagged as UPI Lite in the UPI app. It will be displayed along with the other bank accounts that are linked to the UPI account. Money can be added to it from linked bank account.
Post this, this wallet can be used to make transactions. For transactions of less than 200 INR that are done using this UPI Lite wallet, PIN need not be entered.
UPI Lite is tightly linked with the Phone that is being used.
UPI Lite can have a balance of upto INR 2000 (24.1 USD)
What happens to my money if I don’t want to use the UPI Lite feature ?
You can disable UPI Lite feature and money will be transferred back to bank account.
Want to use UPI Lite ?
Currently, BHIM UPI app (https://bit.ly/3sS0vjv) supports the UPI Lite feature. I used this feature once and it worked for me. But there seems to be some issues with this feature now. When I tried to use it, I am getting an error message that the UPI Lite feature is not available now.
What about security ?
We may wonder on the security aspect as the transaction is done without PIN
During registration of UPI app, the mobile number in the Mobile Phone is validated across the mobile number registered in the bank account. Also, the UPI app requires to login by biometric authentication or PIN set to access the app.
So, it is secure to do transactions using UPI Lite. Given that, only small value transactions of less than 200 INR are allowed as mentioned before. So, the risk of losing significant money is not there.
Conclusion
Though there are some technological issues currently, I am sure these issues will be solved soon and we will be able to use the feature pretty soon.
UPI Lite makes the real time payments even more faster with one less step.