The Reserve Bank of India (RBI) recently announced the launch of UPI Lite X, a new feature addition to the Unified Payments Interface (UPI) platform. This enables users to send and receive payments through offline digital transactions.
This article provides an overview of UPI Lite X, how it enables offline payments, its features, and the differences between UPI and UPI Lite.
What is UPI Lite X?
UPI Lite X allows users to initiate and complete contactless transactions even without internet connectivity. Leveraging Near Field Communication (NFC) technology, it facilitates offline peer-to-peer money transfers.
This new functionality builds on UPI Lite for processing small-value offline payments below INR 500. UPI Lite X is aimed at enhancing convenience, especially in remote areas with poor internet connectivity.
How Does UPI Lite X Enable Offline Payments?
UPI Lite X utilizes the NPCI Common Library (CL) app to allow offline peer-to-peer money transfers when the sender and receiver are in close physical proximity.
It enables transactions using NFC between their mobile devices without needing real-time internet access. This approach eliminates the need for connectivity during transactions.
Key Features of UPI Lite X
Here are some core features of the new UPI Lite X functionality:
Accessibility – Available to all users with NFC-enabled mobile devices. Supports seamless offline transactions.
On-Device Wallets – Money is transferred between users’ mobile on-device wallets rather than bank accounts.
Proximity-Based – The sender and receiver need to be physically close to each other to transfer money offline.
Value Limit – Currently capped at INR 500 per offline transaction.
Additional Security – Protected by device-binding and transaction limits to prevent misuse.
How UPI Lite X is differernt from UPI and UPI Lite
UPI Lite X comes with some fundamental differences compared to the original UPI platform and ecosystem:
Transaction Type
The most significant difference is that UPI Lite X utilizes offline wallet-to-wallet transfers using NFC technology. Transactions occur between the on-device wallets of the sender and receiver in proximity.
On the other hand, UPI enables online transactions by transferring money directly between bank accounts. Users can send or receive funds remotely using UPI, without needing to be physically present near each other.
Proximity Requirement
UPI Lite X requires the sender and receiver to be in close proximity, within wireless signal range for their devices to connect via NFC. This allows the offline wallet-to-wallet transaction to be initiated and completed.
UPI does not require physical proximity between transacting parties since money is transferred through the Internet between bank accounts. One can send or receive UPI payments from anywhere in the world.
Value Limits
UPI allows bank account holders to transfer up to Rs 2 lakh in a single day, providing substantial payment flexibility. On the other hand, UPI Lite X has a relatively low transaction limit of Rs 500 per transfer, given its offline nature and early phase of adoption.
The same value limit of Rs 500 per transaction also applies to UPI Lite. However, the daily aggregate limit for UPI Lite is Rs 4,000, which does not apply to UPI Lite X currently.
Security
UPI Lite X provides additional security compared to UPI through device-binding and low transaction limits to prevent misuse given its offline nature. Users need to authorize their devices before conducting transactions.
UPI offers bank-grade security relying on PIN authorization and encryption. But users must be cautious of phishing attempts and scams to protect money, unlike UPI Lite X’s enhanced on-device protections.
Therefore, while UPI Lite X comes with transaction limitations, its offline nature also insulates it from internet-based fraud and threats. The proximity requirement and device binding offer localized security.
Other UPI Innovations
In addition to unveiling UPI Lite X, the Fintech Festival also witnessed the launch of additional UPI features by RBI:
UPI Tap & Pay – Permits contactless merchant payments by simply tapping NFC-enabled QR codes
Credit Line on UPI – Offers pre-approved digital credit from banks through integration with UPI
Hello UPI – Allows voice-based UPI payments using conversational interfaces and AI
BillPay Connect – Enables bill payments by just messaging “Hi” on any app without needing one specifically
These innovations aim to build on UPI’s success to further digitize payments and financial services for the next generation of digitally savvy Indians.
UPI Lite X introduces offline digital payments to UPI’s versatility, expanding options for users. While still in the initial stages, it has the potential to meaningfully serve users in areas with poor or no internet connectivity once adopted widely. This new digital payment system reinforces India’s growing focus on digital financial inclusion through innovative capabilities like contactless offline payments.