RBI raises payment limit on UPI lite from Rs 200 to Rs 500 without pin

The Reserve Bank of India (RBI) on Thursday raised the transaction limit of UPI Lite to Rs 500 from Rs 200. UPI Lite, which was introduced by the National Payments Corporation of India (NPCI) and RBI in September 2022, is a simplified version of the original UPI payment system. 

UPI Lite's purpose is to enable users to conduct small-value transactions seamlessly without facing banks' occasional processing failures.

Unlike regular UPI transactions, which have a daily limit of Rs 1 lakh, UPI Lite transactions are capped at Rs 500 per transaction. It was Rs 200 initially, besides the overall limit of Rs 2,000 per payment instrument. 

Besides this, RBI said it would introduce offline payments in UPI using near-field tech via UPI Lite. Governor Shaktikantha Das on Thursday said that with the use of new technology, it is proposed to enable conversational payments in UPI that would help users to engage in AI-powered systems to make payments. 

The National Payments Corporation of India (NPCI) is expected to issue instructions to implement Conversational Payments shortly.

"With the objective of harnessing new technologies for enhancing the digital payments experience for users, it is proposed to enable “Conversational Payments” on UPI, which will enable users to engage in conversation with AI-powered systems to make payments; introduce offline payments on UPI using Near Field Communication (NFC) technology through UPI-Lite on-device wallet; and enhance the transaction limit for small value digital payments in off-line mode from Rs 200 to Rs 500 within the overall limit of Rs 2,000 per payment instrument. These initiatives will further deepen the reach and use of digital payments in the country, Das said on Thursday.

UPI Lite accounts are linked to the user's bank accounts but do not rely in real-time on the issuing bank's core banking system, resulting in higher payment success rates even during peak transaction hours and a less cluttered bank passbook.

Users must download a UPI Lite-enabled app, such as BHIM, Google Pay, PhonePe, Paytm, etc. Once the app is installed, users can create a UPI Lite ID and add money to their UPI Lite balance. 

AI push to UPI

RBI Governor Shaktikantha Das on Thursday said that it will allow transactions via conversational payments using AI-enabled technology, carry out transactions in non-Internet spaces using UPI Lite. 

Conversational payments can be defined as payments made using online messaging or chat platforms. These payments take place during live chat and happen between the two parties where one is the chat operator and the other is the payment provider.

“Conversational payments on UPI will enable users to engage in conversation with AI systems to make payments,” RBI Governor Das said during the MPC meeting.

He said the central bank has proposed this measure with the objective to harvest new technology enhancements for users.

The RBI said: "As Artificial Intelligence (AI) is becoming increasingly integrated into the digital economy, conversational instructions hold immense potential in enhancing ease of use, and consequently reach, of the UPI system. It is, therefore, proposed to launch an innovative payment mode viz., “Conversational Payments” on UPI, that will enable users to engage in a conversation with an AI-powered system to initiate and complete transactions in a safe and secure environment. This channel will be made available in both smartphones and feature phones-based UPI channels, thereby helping in the deepening of digital penetration in the country. The facility will, initially, be available in Hindi and English and will subsequently be made available in more Indian languages. Instructions to NPCI will be issued shortly."

Additionally, to further promote the utilisation of UPI Lite, plans are underway to introduce offline transactions using Near Field Communication (NFC) technology. This will not only address connectivity challenges by enabling retail digital payments in low or no internet/telecom zones, but also promises expedited transactions with minimal declines.

“The RBI has once again emphasised the significance of promoting digital payments in its latest Monetary Policy announcement. By proposing innovative concepts such as Conversational Payments and Offline capability on the Unified Payments Interface (UPI), the Central Bank is wholeheartedly advocating the integration of cutting-edge technologies like Artificial Intelligence (AI) and Near Field Communication (NFC) through 'UPI-Lite' on-device wallet, within the realm of payments," said Akash Sinha, CEO & Co-Founder, Cashfree Payments.

"The introduction of 'Conversational Payments' on UPI is a big leap towards further simplifying and personalising the payments journey. Conversational payments can bring about immense possibilities of countless engagement and communication. This also paves the way for the government’s collaboration with up-and-coming tech companies focused on AI. The conversation should transcend intelligence, definitely, more than artificial, becoming cultural to the digital payment ecosystem thus firing twin barrels of access with accountability. Conversational payments in UPI, be rest assured, will be the next ‘Sampoorna Avatar’ from the pantheon of ‘God UPI’," said Rahul Tandon, Chief Product Officer, Safexpay.

"UPI has significantly contributed to positioning India as the leader of digital payments. The enhancements proposed by the Central Bank will further accelerate the adoption of UPI. While QR code made payments very easy for everyone, the introduction of “Conversational Payments” on UPI has the potential to take the ease of payments to the next level. Those who find it difficult to navigate through a mobile application for making digital payments as they are not tech-savvy or want to save time by getting AI to direct them, will now be able to execute UPI transactions with ease. With the introduction of Near Field Communication (NFC) technology through ‘UPI-Lite’ on-device wallet, offline payments will become more secure while being seamless and fast," said Mandar Agashe, Founder and MD of Sarvatra Technologies.