Difference Between Upi and Upi Lite

Difference Between Upi and Upi Lite

22 April, 2024

Unified Payments Interface (UPI) has revolutionised the Indian digital payments ecosystem, by simplifying transactions, while reducing costs and increasing efficiency. It has enabled us to make instant transactions directly from our bank accounts, eliminating the need for physical cash. UPI apps like HDFC Bank’s PayZapp promote financial inclusion by making online transactions accessible to a wider range of people, including residents in rural areas. Besides UPI, there is a lighter version of this payment system known as UPI Lite, which is ideal for small-value transactions. In this article, we’ve compared UPI vs UPI lite and explained how you can make instant big-and-small ticket transactions via PayZapp.

Enjoy seamless transfers with PayZapp. Download now and send money to any UPI ID or mobile number quickly.

What is UPI?

Developed by the National Payment Corporation of India (NPCI), the United Payments Interface is an instant payment system that facilitates peer-to peer fund transfers through mobile devices like smartphones and tablets. You can also conduct person to merchant or P2M transactions via UPI.

With UPI, funds are transferred into bank accounts in real time, which means beneficiaries receive funds into their accounts instantly. In order to transfer funds, you only need the Registered Mobile Number (RMN) linked to a bank account or the unique Quick Response (QR) code of the beneficiary. Senders simply need to enter either the receiver’s RMN or scan the QR code to transfer money within seconds.
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What is UPI lite?

A lighter version of UPI, designed for small-value transactions, UPI-Lite is an on-device wallet launched by the NCPI September 2022. UPI lite was introduced to optimise processing resources for banks and reduce transaction failures on the UPI platform. UPI-Lite can process over 10 million transactions a month while facilitating offline transactions using Near Field Communication (NFC) technology. This feature allows for retail digital payments even in situations where internet or telecom connectivity is weak or unavailable.

By leveraging UPI-Lite, users can make contactless payments for everyday small value and transit payments in the remotest locations of the country. The Reserve Bank of India (RBI) has proposed enhancing the per transaction limit for small value digital payments, including UPI Lite, to ₹500 to encourage wider adoption of this payment mode for various use cases.

UPI vs UPI Lite – A Comparison

UPI and UPI Lite are both payment systems designed for hassle-free and secure digital transactions in India. However, there are some key differences between them.

· Transaction Limit:

One of the primary differences between UPI and UPI Lite is the transaction limit. With UPI Lite, the transaction limit is set at ₹500 per transaction, with an overall limit of ₹2000 per payment instrument. These lower limits are specifically designed for small-value transactions, that can still be conducted despite the lack of a strong internet connection. On the other hand, UPI allows for comparatively higher transaction limit. Since such transactions rely on internet services, you can transfer as much as ₹1 lakh per transaction via UPI.

· Functionality:

UPI provides a wide range of functionalities beyond small-value transactions. For instance, you can conduct person-to-person transfers, person to merchant transfers and even pay your various utility bills of differing values with UPI. As for UPI Lite, this payment system primarily focuses on providing a quick and seamless experience for small payments specifically. You may not be able to pay bills, insurance premiums or purchase products using UPI lite.

· Bank Statement

Any individual transactions made through the UPI platform are reflected in your bank passbook. This way you can access a detailed history of all transactions conducted via UPI. In contrast, individual payments made through UPI Lite shall not reflect in your bank passbook. Instead, you can see a single entry each time you add balances into your UPI Lite wallet, thereby simplifying the transaction history.

· Offline Payments

Both UPI and UPI Lite support online transactions. However, if you do not have strong internet connectivity and wish to initiate a transaction, you can use UPI Lite and leverage the NFC technology used by the app to conduct offline transactions. Thus, even if you need to send a slightly higher sum of money, you can do so in bursts of smaller amounts without worrying about having a stable internet connection.

UPI vs UPI Lite – What Should You Choose

Both UPI and UPI lite enable quick, convenient, and seamless fund transfer facilities. You can use either of these payment methods to initiate instant fund transfers. As for which is the better mode of payment for you; it totally depends on the amount you need to transfer. Also, the availability or the lack thereof, of a stable internet connection should be taken into consideration while initiating a UPI vs UPI lite transaction. Lastly, you must consider the fact that UPI transactions shall reflect in your bank passbook, whereas UPI lite transactions are only deemed as wallet entries.

Make Faster Payments With UPI via The PayZapp App!

As more and more Indians are getting comfortable using smartphones and becoming more internet savvy than ever, UPI transactions are becoming popular. Both, UPI and UPI Lite play a crucial role in driving financial inclusion in India. HDFC Bank’s PayZapp is a type of UPI transfer platform on which you can conduct big and small instant fund transfers.

Like UPI, PayZapp allows you to conduct high value transactions, and like UPI Lite, it doubles as a cash wallet. PayZapp fulfils your varying payment needs, allowing you to pay utility bills, insurance premiums, loan EMIs, and more. You can also book hotel reservations and travel tickets on PayZapp, among other things.

​​​​​​​*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.

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