Transaction limit increased to Rs 500 for small value digital payments in offline mode like UPI Lite

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To encourage the usage of the UPI-Lite wallets in places where internet access is poor or non-available, the Reserve Bank of India (RBI) has increased the upper limit of an offline payment transaction from Rs 200 to Rs 500. The overall limit for offline transactions on a payment instrument, however, remains Rs 2,000 at all times.According to an RBI notification issued on August 24, 2023, “As announced in the Statement on Development and Regulatory Policies dated August 10, 2023, the upper limit of an offline payment transaction is increased to Rs 500. Other instructions mentioned in the framework shall continue to remain applicable as before.”

On August 10, 2023, the Reserve Bank of India (RBI) raised the transaction limit from Rs 200 to Rs 500 in an effort to promote the widespread adoption of UPI Lite online.

This will enable faster, more reliable, and contactless payments for everyday small value purchases, transit payments, and so on by eliminating the need for two-factor verification for small value transactions.

Here is what experts had said after the RBI MPC announcements on enhancement of transaction limits for small value digital payments:

Dr. Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India: To ease customer experience in payment system, especially in UPI, RBI has announced Conversational Payments on UPI, which will enable users to engage in a conversation with an AI-powered system to do transactions and allowed offline payments in UPI through NFC and increased transactions limits to Rs 500 for small value digital payments in offline mode. Both UPI lite and NCMC card work as wallet and the pre-loaded money in App/Card can be spend near offline mode, i.e., debit (payments) can be made without an Internet connection, and credits into the account will be done online. As the NCMC card can be used at ATM, online payments etc. so the increase in transaction limit to Rs 500 will enhance use of cash-less transactions through UPI lite and NCMC card.Adelia Castelino, Co-Founder and Managing Director of In-Solutions Global: The decision to enhance the transaction limit for small value payments in offline mode from Rs 200 to Rs 500 is a positive move. This higher limit will accommodate a broader spectrum of daily transactions, making UPI Lite a viable option for various day-to-day expenses. It will also encourage more users to adopt digital payment methods for their convenience.What is UPI Lite?
UPI Lite is an ‘on-device wallet’ feature that will allow users to make real-time small-value payments without using a UPI PIN.

How to use UPI Lite
The wallet on the app must first have money loaded into it from your bank account. Then, you can utilise those pre-loaded money to make payments via UPI Lite from the wallet.

What is the transaction limit for UPI Lite
Transaction limit is increased to Rs 500 from Rs 200.

Other announcements during RBI MPC on Aug 10, 2023
RBI Governor proposed to introduce Near Field Communication (NFC) technology to facilitate offline payments. “To promote the use of UPI Lite, it is proposed to facilitate offline transactions using Near Field Communication (NFC) technology. This feature will not only enable retail digital payments in situations where internet/telecom connectivity is weak or not available, it will also ensure speed, with minimal transaction declined. Instructions to NPCI will be issued shortly,” RBI MPC statement said.

Important FAQs according to the NPCI website.
How will a customer disable UPI Lite account?
The customer will have the option to disable a specific UPI LITE (On-Device wallet). Upon clicking disable button, the balance funds available with the bank in LITE account shall be released in the customer’s account.

Will Top-up in UPI Lite be in real time?
Yes, Top-up transaction in UPI LITE is in real-time

What if a customer wants to add another UPI Lite (On-Device wallet) account on an app which has an active UPI Lite (On-Device wallet)?
The customer will have to first disable the existing LITE account to initiate a refund for the UPI LITE (On-Device wallet) balance (stored in the CL) which is active on a given app and then enable UPI LITE account using the bank account of their choice.

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