In a March 16 circular, NPCI told UPI member banks that UPI Lite will be launched as a pilot with multiple banks and app providers. After a decent level of comfort, a full commercial launch is announced with on-boarding compliance timelines for the publishers and app providers. FE has seen a copy of the circular.

The National Payments Corporation of India (NPCI) is nearing a trial launch of wallet-based Unified Payments Interface (UPI) payments. The on-device wallet service, called UPI Lite, will align with the Reserve Bank of India (RBI) framework for offline digital payments. It allows trades of up to Rs 200 at a time with portfolio balances capped at Rs 2,000.

In a March 16 circular, NPCI told UPI member banks that UPI Lite will be launched as a pilot with multiple banks and app providers. After a decent level of comfort, a full commercial launch is announced with on-boarding compliance timelines for the publishers and app providers. FE has seen a copy of the circular.

In the first phase, UPI Lite will process transactions in near-offline mode, meaning that while debit transactions from the wallet will take place in offline mode, credits will be processed online. At a later stage, UPI Lite will process transactions completely offline.

According to the circular, once UPI Lite goes live, UPI users will have the option to enable the wallet on the device in their app. The user can then allocate funds from their bank account to UPI Lite. The money is in the user’s bank in a blocked or designated account.

Replenishment of the wallet is only allowed in online mode with additional factor authentication (AFA) or with UPI AutoPay, which in turn would be registered by the user with AFA in online mode. Company executives say the RBI has capped the value per transaction in the offline digital payment framework to Rs 200 so that the risk of losing money can be minimized in the absence of AFA.

The NPCI circular cited studies stating that about 75% of the total volume of retail transactions in India, including cash, has a value below Rs 100. Half of all UPI transactions have a transaction value up to Rs 200.

NPCI believes that UPI Lite will bring the benefit of superior user experience and clear bank statement to users. It will also reduce the burden on core banking systems.

The launch of UPI Lite is one of the measures to make the UPI platform accessible to a larger group of users. Earlier this month, the RBI launched UPI support for feature phone users. The payment ecosystem also works to enable Aadhaar OTP-based UPI onboarding, which does not require users to use a debit card. Banks and other payment system players are expected to get their systems ready for launch before June 30.


This post NPCI Approaches Trial Launch of Wallet-Based UPI Payments was original published at “https://www.financialexpress.com/industry/banking-finance/npci-nearing-pilot-launch-of-wallet-based-upi-payments/2464302/”

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