The Reserve Bank of India (RBI) has announced a new update for the UPI Lite system to enable wider adoption and simplify the user experience. The latest proposal brings UPI Lite under the e-mandate framework, allowing users to automatically refill their UPI Lite wallets from their bank accounts without requiring any additional approval. Here’s everything we know.

This auto-replenishment feature is activated when the wallet balance falls below the limit set by the user. This means that users will no longer have to manually top up their wallets every time the balance is low, simplifying the process of small value digital payments. This change is expected to further increase the ease and frequency of using UPI Lite for daily transactions, leading to a more cashless society.

UPI Lite, launched in September 2022, was designed to facilitate quick and hassle-free small-value payments through an on-device wallet. This payment solution allows users to transact easily, especially transactions less than Rs 500. The UPI Lite system uses the robust NPCI Common Library (CL) application to process payments, ensuring seamless integration with the existing UPI infrastructure on mobile phones. The system provides a consistent, compliant, and widely accepted platform for users.

Currently, UPI Lite users enjoy a daily transaction limit of Rs 2,000, with the upper limit for any single payment set at Rs 500. These limits are particularly useful for managing everyday transactions such as groceries, public transport or small retail purchases, where speed and convenience are paramount.

UPI Lite aims to provide a user-friendly solution for managing small-value transactions. By bypassing the need for real-time processing by the sender bank’s core banking system, UPI Lite ensures that these transactions are fast and convenient, while still maintaining adequate security measures.

The introduction of e-mandate for UPI Lite is a strategic move by RBI to promote digital payments across the country. However, there is a possibility that many users will not be comfortable with this feature and will have privacy issues as this option will not require any approval from banks to automatically add money to the wallet. It remains to be seen whether users will get the option to disable this feature if they do not want to use it.