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PhonePe launches UPI Lite feature, joining BHIM and Paytm

PhonePe announced that it now supports the UPI Lite feature, which allows users to make payments under Rs 200 from an on-device wallet


PhonePe, on May 3, announced that it now supports the UPI Lite feature, which allows users to make low-value payments under Rs 200 from an on-device wallet without entering a PIN or connecting with the bank’s servers. All major banks support UPI Lite on PhonePe and payment through UPI Lite is accepted at all merchants that accept the regular UPI, PhonePe informed in a press release.

Why does this matter: PhonePe joins Paytm and BHIM, which are currently the only other UPI apps that support UPI Lite. This could help PhonePe maintain its lead in the UPI market share as UPI Lite has many noteworthy features:

  1. It is expected to have a lower transaction failure rate as it relies on on-device account balance and does not need to connect with bank servers.
  2. It allows users to make payments offline, which is useful in regions where internet connectivity is lagging and patchy.
  3. The transactions using UPI Lite will be a tad bit faster as no PIN or external communication is required.
  4. It will reduce the strain on the existing UPI infrastructure as small-ticket transactions, which make up the bulk of overall UPI payments, can be processed on the user’s device.

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How can PhonePe users activate UPI Lite: “Users can instantly activate the feature on their PhonePe app through a simple process that doesn’t involve any KYC authentication and create a UPI LITE account. Users can load up to Rs. 2000 in their LITE account and make transactions of up to Rs. 200 or less in one go,” PhonePe explained. On Android devices, the option to activate UPI Lite appears right above the “Recharge & Pay Bills” section. On iOS devices, the feature doesn’t seem to be live yet.

Want to know more about UPI Lite: If you’re curious to know more about why National Payments Corporation of India (NCPI) launched UPI Lite, why there is a ₹200 limit, what are the other features of UPI Lite, how will it work, which devices it won’t work on, how will disputes be addressed, what to do when changing phones, etc., check out our explainer here.

This post is released under a CC-BY-SA 4.0 license. Please feel free to republish on your site, with attribution and a link. Adaptation and rewriting, though allowed, should be true to the original.

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