To encourage the usage of the UPI-Lite wallet in areas with limited or no internet access, the Reserve Bank of India has decided to raise the maximum limit for offline payment transactions from Rs 200 to Rs 500. This change, however, doesn’t affect the overall cap of Rs 2,000 for offline transactions using this payment method.
As stated in the communication on Development and Regulatory Policies released on August 10, 2023, the upper limit for offline payment transactions has been revised to Rs 500. The existing guidelines within the framework will remain in effect, according to an official notification from the Reserve Bank of India.
According to a report by The Economic Times, this adjustment aims to facilitate quicker, more dependable, and contactless payments for daily low-value purchases, transit fees, and similar transactions. This change is expected to eliminate the need for two-factor authentication for minor-value transactions.
What is UPI Lite? UPI Lite is an embedded wallet feature that empowers users to perform real-time, small-value transactions without requiring a UPI PIN.
How to use UPI Lite? Users must first transfer funds from their bank accounts to the app’s wallet. This balance can then be used to execute payments through UPI Lite from the wallet.
“Both UPI Lite and NCMC card function as wallets, containing pre-loaded funds that can be used in offline scenarios. This implies that debits (payments) can be executed without an internet connection, while credits are processed online. Given that the NCMC card is suitable for ATM withdrawals, online payments, etc., the enhanced transaction limit of Rs 500 will contribute to the increased adoption of cashless transactions via UPI Lite and the NCMC card,” stated Dr. Soumya Kanti Ghosh, Group Chief Economic Advisor at the State Bank of India, in a conversation with The Economic Times.