The Reserve Bank of India (RBI) has announced a new update to the UPI Lite system to encourage wider usage and simplify the user experience. The latest update integrates UPI Lite with the e-mandate framework, allowing users to automatically replenish their wallets without additional approvals from their bank accounts. Here are the details.
The Reserve Bank of India (RBI) on June 7 announced the introduction of auto-replenishment of UPI Lite wallet, under its emandate framework. This was announced by RBI Governor Shaktikanta Das during the central bank’s monetary policy press meet. pic.twitter.com/x176kwK2Rn
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Introducing Auto-Replenishment System
This auto-replenishment feature activates when the wallet balance drops below a user-defined threshold, eliminating the need for manual top-ups when the balance is low. This change is expected to streamline small-value digital payments, making it easier and more frequent for users to utilize UPI Lite for daily transactions, thereby promoting a cashless society.
UPI Lite was launched in September 2022 to facilitate quick and hassle-free small-value payments through an on-device wallet. It enables users to handle transactions effortlessly, especially those below Rs 500. This system leverages the robust NPCI Common Library (CL) application for payment processing, ensuring seamless integration with the existing UPI infrastructure on mobile phones. This system offers a consistent, compliant, and widely accepted platform for users.
Currently, UPI Lite users have a daily transaction limit of Rs 2,000, with a maximum of Rs 500 per transaction. These limits are particularly useful for everyday transactions such as groceries, public transport, or small retail purchases, where speed and convenience are crucial.
UPI Lite is designed to offer a user-friendly solution for managing small-value transactions by bypassing the need for real-time processing by the remitter bank’s core banking systems. This ensures fast and convenient transactions while maintaining adequate security measures.
The RBI’s introduction of the e-mandate for UPI Lite is a strategic move to enhance digital payment adoption across the country. However, some users may have privacy concerns since this feature allows automatic wallet replenishment from bank accounts without explicit approval. It remains to be seen if users will have the option to disable this feature if they prefer not to use it.
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