The Reserve Bank of India (RBI) has unveiled plans to introduce auto-replenishment for UPI Lite wallets, aiming to streamline online transactions and enhance user convenience.
Under the proposed framework, UPI Lite wallets will be automatically reloaded once the balance is depleted, eliminating the need for customers to manually top up their wallets. RBI Governor Shaktikanta Das announced this initiative during the central bank’s policy meeting, emphasizing its significance in facilitating seamless transactions for users.
Currently, UPI Lite allows users to load their wallets with up to ₹2,000 and conduct transactions of up to ₹500 without requiring additional authentication. By integrating UPI Lite into the e-mandate framework, the RBI aims to empower customers with an auto-replenishment feature, ensuring uninterrupted access to digital payment services.
Mr. Das highlighted that since the funds remain with the customers, no additional authentication or pre-debit notification will be necessary, simplifying the transaction process. The RBI is set to issue guidelines in this regard soon, providing clarity and guidance for implementation.
In addition to the auto-replenishment feature, the RBI has proposed the establishment of a Digital Payments Intelligence Platform, leveraging advanced technologies to combat payment fraud risks effectively.
Understanding UPI Lite
Introduced in 2022, UPI Lite serves as an online payment system tailored for retail users, primarily facilitating low-value transactions, such as those encountered at grocery stores. Notably, UPI Lite transactions do not require a PIN, and there are no KYC requirements.
Linked to an online wallet, UPI Lite operates on the principle of treating the wallet balance as loose cash. Users must maintain a sufficient balance in their UPI Lite wallets to execute payments seamlessly. Currently, around 12 bank and payment apps support the UPI Lite mechanism, as per the National Payments Corporation of India.
The integration of auto-replenishment functionality into UPI Lite wallets marks a significant step towards enhancing the accessibility and efficiency of digital payment systems, aligning with India’s ongoing efforts to promote a cashless economy and foster financial inclusion.
