UPI Lite Is Here With Enhanced Features—Can You Use It Online? Know The Details

The National Payment Corporation of India (NPCI) has enhanced the per transaction limit for UPI Lite to Rs 1,000 from the previous Rs 500 and the total limit to Rs 5,000 from earlier Rs 2,000. According to the latest NPCI circular dated February 27, 2025, “For UPI Lite, the enhanced limit shall be Rs 1000 per transaction with Rs 5,000 being the total limit. Replenishment of the used limit shall be allowed only in online mode with AFA”. Here, AFA means an additional factor of authentication.

In the October 2024 monetary policy meeting (MPC), the RBI announced increasing the UPI Lite transaction limit. As per the statement, “A limit of ₹500 per transaction and an overall limit of ₹2000 per UPI Lite wallet, is presently applicable, with the facility of auto-replenishment. To widen the scope of usage of this product, it has now been decided to increase the UPI Lite wallet limit to ₹5,000 and per-transaction limit to ₹1,000”.

On December 4, 2024, RBI issued a notification ‘Framework for Facilitating Small Value Digital Payments in Offline Mode’ regarding it. It updated the offline framework UPI Lite transaction limits enhancement was announced.  

UPI Lite is a digital wallet. Its utility is for small and regular payments through the wallet and keeping the bank account statement clean, saving it from unnecessary cluttering. UPI Lite makes transaction easier as payment is made directly with no need of PIN authorisation.

When Will The Changes Become Available To Users?

Mohan K, Founder, TechFini, a UPI-based payment infrastructure provider, clarifies, “On Feb 27th, NPCI asked all the UPI members, which includes banks and payment service providers to implement this enhancement immediately. The enhanced limits will become effective once the respective banks update their systems to reflect these changes. Therefore, while the change is officially mandated, the actual availability to the consumers depends on how quickly each bank or payment platform integrates these new limits. Banks typically take a few weeks to make necessary system updates, so customers might experience a slight delay in accessing the enhanced limits depending on the bank's processing timelines”.

Is The Enhanced Limit Only For Offline Transactions?

Mohan states, ”The enhanced UPI Lite limits apply to both offline and online transactions, providing users with greater flexibility in using the platform for a variety of payment scenarios. Previously, UPI Lite was predominantly used for small, offline payments where users could pay with a low internet connection. With the enhanced limits, users can now carry out both offline and online transactions with higher amounts per transaction, up to Rs 1,000, and a total wallet limit of Rs 5,000. This makes UPI Lite a more attractive option for a wider range of transactions, whether in person or online, as users can now complete larger transactions on the go, without the need for a stable internet connection”.

Other Recent and Important Changes

Transfer-Out Facility: On February 21, NPCI issued a circular directing all issuer banks, including PSP banks and UPI Apps, live on UPI Lite to implement the ‘Transfer out’ facility.

Under this facility, users will be able to withdraw funds from their UPI Lite wallet balance to their bank account from which the money was transferred to the wallet. Earlier transfer out was possible only when closing or disabling the UPI Lite wallet. The issuer banks are required to maintain the Lite Reference Number (LRN) level balances and reconcile them daily with NPCI to keep in sync. The active UPI Lite will be secured with a passcode, pattern-based locking, or biometric to be used at the time of login.

As per the NPCI circular, the members will need to deploy proper systems in place and make the necessary changes by March 31, 2025.

Auto top-up: On August 27, the NPCI introduced an auto top-up facility. It means that whenever the balance in the wallet goes below the minimum balance, the wallet gets replenished. As far as the maximum limit is concerned, earlier it was Rs 2,000, which is now changed to Rs 5,000. Users can set the auto top-up limit to the maximum limit specified by the NPCI.

According to NPCI’s February circular, the customer will have the option to set auto top-up for replenishment. “All the members are required to make the necessary changes pertaining to limit increase immediately”.

Further, NPCI has directed issuer banks to identify zero transaction UPI Lite accounts and refund the amount lying in these accounts to the source bank accounts. Such zero-transaction accounts will be those with no transaction in six months. 

However, this change will be effective by June 30, 2025.