Fintech platform PhonePe owned by Walmart, has launched a Unified Payments Interface (UPI) Lite feature on its app, allowing users to initiate low-value payments of up to INR 200 without the need for a PIN. PhonePe’s rival, Paytm, had already launched the UPI Lite feature earlier this year. UPI Lite is supported by all major banks and is accepted at all UPI merchants and QRs across the country.
The UPI Lite wallet balance is a virtual ‘on-device’ balance and reflects the UPI Lite balance allocated by users in their respective accounts. Once the UPI Lite virtual wallet is loaded, the app will automatically use the UPI Lite balance for transactions up to INR 200, eliminating the need for peer-to-peer transactions.
PhonePe users can load up to INR 2,000 in their account and make transactions of up to INR 200 or less at a time. They can activate the feature on their PhonePe app without any KYC authentication to create a UPI Lite account. Users will receive a daily SMS with the history of their UPI Lite transactions from their bank.
UPI Lite will help in decluttering bank statements/passbooks with small-value transactions, as these transactions will only be visible in the Lite account and not in the bank statement, according to PhonePe. Rahul Chari, PhonePe’s cofounder and CTO, said, “Small-ticket transactions make up a significant volume of the overall UPI payments, and UPI Lite will make them quicker and convenient, without putting a strain on the existing UPI infrastructure.”
After raising $200 million in primary capital from Walmart as part of its ongoing $1 billion fundraise, PhonePe said earlier this year that it would use the funds to scale new businesses and integrate new UPI features such as UPI Lite and Credit on UPI. The Reserve Bank of India (RBI) launched UPI Lite in September last year to boost the UPI ecosystem, which has seen impressive growth since its launch. In March, UPI processed a record 868.5 crore transactions worth INR 14.1 lakh crore, with PhonePe, Google Pay, and Paytm continuing to lead the race.
Within a month of UPI Lite’s launch, Paytm reported that 4.3 million customers had used the new feature and recorded over 10 million transactions, making it one of the most exciting launches from the National Payments Corporation of India (NPCI) in recent times. PhonePe hopes that its launch of the UPI Lite feature will help it stay competitive in the digital payments market, which is becoming increasingly crowded.
