Published on: January 12, 2023

Digital payments

Digital payments

Why in news? Union cabinet approves incentive scheme for banks to promote digital payments


  • The fund will be paid to banks in view of the lack of a Merchant Discount Rate (MDR) a commission on digital transactions  for UPI and RuPay transactions.
  • Financial assistance is mainly for sustainability of building digital payments infrastructure in the absence of payments needed to maintain them.
  • It also promote UPI Lite and UPI 123PAY as economical and user-friendly digital payments solutions and enable further deepening of digital payments

About UPI Lite

  • Parent Organization : National Payments Corporation of India (NPCI)
  • Nature : UPI Lite is an ‘on-device wallet’ feature that will allow users to make real-time small-value payments.
  • Transaction Limit: The upper limit is Rs 200. Total balance of the on-device wallet can be up to Rs 2,000.
  • Is PIN mandatory?: No need a PIN to send money via UPI Lite
  • Currently, only debit from wallet is permitted. All credits to UPI Lite will directly go to your bank account
  • Who can use?: UPI Lite feature has been enabled on the BHIM app. Currently, customers of eight banks can use this facility
  • SMS daily containing the history of UPI Lite transactions carried out during the day from the bank will be generated

UPI 123Pay

  • Parent organization : Jointly by NPCI and the RBI
  • Suite of solutions developed for Non-Smart phone / feature phone users to use the UPI without internet connectivity.
  • No requirement of Smart Phone and Internet
  • Transaction is done through Interactive Voice Response
  • Registration of account with UPI 123PAY, require a 4-6 digit UPI PIN.
  • Customer have to enter UPI PIN every time he makes the transactions.
  • Transaction Limit: Rs 1,00,000.
  • multiple bank accounts cannot be linked on UPI123pay

How is UPI Lite different from UPI 123Pay?