The Unified Payment Interface (UPI) has become the most widely-used digital payment system because of its ease of use and convenience. The National Payment Corporation of India (NPCI) has recently announced two new versions of UPI — UPI Lite and UPI 123Pay.

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The two systems may have led to some confusion.

So, here's a look at how each of them works:

UPI Lite

What is it?

UPI Lite is an ‘on-device wallet.’ For using this, consumers must first add money to the app's wallet from their bank accounts and then make real-time payments without the internet.

How it works?

UPI Lite allows feature phone users to access UPI networks and make digital payments straight from their bank accounts using their phones.

Customers will first have to add funds from their bank accounts to the app (using internet connectivity) by authentication (AFA) or through UPI AutoPay, which needs to be registered online using an AFA.

It's vital to note that the UPI Lite balance in the app is only a virtual ‘on-device’ balance and a reflection of the UPI Lite balance allocated by the user in the account.

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After adding funds, UPI Lite can be accessed and transactions can be carried out. No separate authorisation or UPI PIN is required for carrying out this transaction. Also, no internet connectivity is necessary for this.

The upper limit of a UPI Lite payment transaction is Rs 200, while the total limit of UPI Lite balance for an on-device wallet is Rs 2,000 at any point in time.

UPI 123Pay

What is it?

UPI 123PAY, on the other hand, is an instant payment system for feature phone users who can use UPI payment service in a safe and secure manner.

How it works?

Through UPI 123Pay, feature phone users can undertake a host of transactions based on four technology alternatives — calling an IVR (interactive voice response) number, app functionality in feature phones, missed call-based approach and also proximity sound-based payments.

Through pre-defined IVR number

Users can call on any one of the numbers — 080 4516 3666, 6366 200 200, 080 4516 3581 — and complete the formalities related to enabling of UPI.

Through missed call

Users can give a missed call to the merchant's number, and they will receive a call back from the number 08071 800 800. Now, they can authenticate the transaction by entering the UPI pin and payment will be done.

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Through functionality implemented by OEM

Digital solution on this UPI app is developed by Gupshup with Airtel Payments Bank. Here the solution provider will partner with the OEM or feature phone mobile manufacturers in order to enable a payment app embedded in the C language, according to Bankbazaar.

Through sound-based technology

Users can make payments by calling the IVR number 6366 200 200 and choosing the 'pay to merchant' option, where sound waves will be used to complete the payment.

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(Edited by : Shoma Bhattacharjee)

First Published:Sept 26, 2022 5:59 PM IST