UPI Lite Auto-Fill Facility: How Does The New Feature Benefit Users?

UPI Lite users will get an auto-fill feature on the payment apps from October 31, 2024, whenever the account balance goes below their specified transaction limit. The National Payments Corporation of India (NPCI) announced the facility in an August 27, 2024, circular. It said, “The UPI Lite balance will automatically be reloaded by an amount chosen by the user, not exceeding the UPI Lite balance limit, whenever the balance falls below a minimum limit set by them. This increases the convenience and adaptability of UPI Lite by automating the process of reloading funds. Additionally, users shall be provided with the option of revoking the Auto Top-up mandate at any point in time by the PSP (Payment Service Provider/App.”

UPI Lite is an online wallet to make small-value payments without using a PIN for every transaction. Unlike the popular Unified Payment Interface (UPI), where a user transfers money from the bank account, and the transaction shows in the statement, UPI Lite works as a wallet where the money is transferred to make small payments of up to Rs 2,000, but the transactions do not show in the bank statement to keep it clean. Let us learn more about UPI Lite features.

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What Are The Changes?

Effective October 31, 2024, UPI Lite will have the auto-replenishment feature, where the balance will automatically get replenished with a fixed amount set by the user. The user can decide the limit for auto-replenishment. For example, if a person sets a limit of Rs 250, whenever the balance falls below this threshold, the mandate will trigger an automatic refill of a fixed amount set by the user.

According to the circular, the banks must provide the UPI Lite mandate to allow debit whenever the request comes from apps. The apps must provide an interface to support UPI Lite functionality, and the apps and the service providers must also develop necessary controls to limit the auto-fill transactions to five per day per UPI Lite account.

What Is UPI Lite?

UPI Lite is a solution for carrying out small value transfers with ease. So, for a transaction of less than Rs 500 through UPI Lite, one does not need to enter the PIN. These are particularly useful for small and regular transactions such as payments to vegetable vendors, payments for public commuting, and parking, among others.

How Does It Work?

UPI Lite uses the UPI ecosystem to run the application on mobile phones with the exact compliance measures as in UPI. The objective of UPI Lite is to bring more people into the fold of the digital ecosystem.

As per the NPCI website, 41 banks and 15 non-banking entities will provide this service. The system is fast and hassle-free, as there is no need to enter the PIN. One only needs to check the apps offering this facility, open the app, select the receiver, select pay, and enter the amount. The money will be transferred in real-time.

Digital security is paramount these days, and that is why banks and other institutions require 2-factor authentication to complete transactions. However, as UPI Lite transactions are of small value (less than Rs 500), single-factor authentication makes the transaction process quick and easy.

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How To Enable UPI Lite And Use It:

· Users need to have the app linked to their bank account

· Open the mobile app

· Look for the option ‘Enable UPI LITE’ on the homepage of the app and click on it

· Read the terms and conditions, tick the check box

· Write the amount in the box to be added to the UPI Lite wallet and select the bank account to link with it

· Enter the PIN to set the UPI Lite.

It is a one-time exercise. Once it is set up, the user will not be required to enter the PIN to make payment with UPI Lite.

How Will It Benefit Users?

Users will not need to manually refill their accounts every other day after setting up the auto-replenishment facility. It will save time and make using UPI Lite more convenient and user-friendly.