What Are UPI And UPI Lite? How To Use In 2023

Hello dear Friends In this article, we will learn in detail about the concept of ”What Are UPI And UPI Lite, How To Use In 2023” know what is UPI and UPI lite and how to create UPI account. We will also highlight the benefits of UPI and its various applications. So, read on to know everything you need to know about UPI.

What Is UPI

What Is UPI? Let’s understand.

The acronym UPI stands for Unified Payments Interface, a system that empowers users to manage multiple bank accounts through a single mobile application offered by any participating bank. It facilitates seamless fund transfers and integrates various banking services under one roof. UPI also accommodates ‘Peer to Peer’ collect requests, enabling scheduled payments based on individual needs and convenience.

What Is UPI

NPCI, or the National Payments Corporation of India, initiated a pilot program with 21 member banks, with the inaugural launch conducted by Dr. Raghuram G Rajan, Governor of the RBI, in Mumbai on April 11, 2016. Following this, various banks began offering UPI-enabled apps, including Paytm, Google Pay, and PhonePe, on the Google Play Store, starting from August 25, 2016.

What Is UPI?

  • UPI stands for Unified Payment Interface.
  • It offers instant money transfer capabilities.
  • It eliminates the need to share or collect sensitive bank account information.
  • UPI is a secure alternative to carrying physical cash.
  • Its applications range from paying merchants to utility bill payments.

What Is UPI Lite?

What Is UPI lite

The UPI Lite facility was introduced by the Reserve Bank of India in September 2022 to promote digital payments and simplify the UPI transaction process. Platforms like PhonePe and Paytm have embraced this feature to streamline transactions, especially for smaller amounts. Approximately 50% of UPI transactions in India, as per an NPCI circular from May 2022, involve amounts of Rs 200 or less, leading to congestion and delays. UPI Lite aims to facilitate instant payments and reduce traffic in banks. Notably, the BHIM app already supports transactions through UPI Lite, with Paytm being the first digital payment app to introduce UPI Lite on its platform.

Key Features of UPI Lite

What Is UPI

UPI Lite allows users to conduct transactions using an ‘on-device’ wallet, bypassing the need to access a linked bank account. Once set up, users can make instant transactions of up to Rs 200 without entering a UPI PIN or confirming the transaction. Users can add up to Rs 2,000 to UPI Lite twice a day, enabling daily transactions of up to Rs 4,000. This feature not only minimizes the risk of fraud but also offers flexibility in low-cost UPI transactions. Moreover, users can transfer UPI balances back to their linked bank accounts without incurring any charges.

Setting Up UPI Lite on Paytm

For Paytm users:

  1. First open the Paytm app on your Android or iOS phone.
  2. Click on the “Profile” button at the top left corner of the home page.
  3. Now you have to go to ”other settings” and select ”UPI and payments” settings.
  4. Choose “UPI Lite” and select the eligible account for UPI Lite.
  5. Add balance to activate UPI Lite and start using it.

What Is a UPI Account?

A UPI account is a modern payment system available in India, enabling individuals to make payments directly from their bank accounts. This account is linked to your mobile number and assigns you a unique ID, known as a Legacy Financial Services ID or VPA, for making payments. UPI accounts offer the flexibility to withdraw or send money and make payments within various financial apps.

Locating Your UPI ID

If you want to find your UPI ID then follow these steps:

  1. Open your payments app and navigate to the “UPI” section.
  2. Select “Register UPI” or “Legacy Financial Services ID (VPA).”
  3. Enter your mobile number and required details.
  4. Click “Next” to generate your UPI ID, which will be displayed on the screen.

If you don’t use a payment app or your bank isn’t linked to it, you can obtain your UPI ID from your bank’s customer care center.

Creating a UPI ID

To create a UPI ID, you’ll need a payment app linked to your bank account. Here’s how to do it:

  1. Download a payment app like Google Pay, PhonePe, Paytm, or use your bank’s website or app.
  2. Open the app and link your account with your mobile number.
  3. After linking your bank account, provide your name and email ID.
  4. Navigate to the “UPI” section and select “Legacy Financial Services ID (VPA).”
  5. Choose a name for your UPI ID (e.g., raj@upi) and create it.
  6. Your UPI ID is now ready for making payments.

Making Payments Through UPI

To make payments using your UPI ID:

  1. Open your payments app and log in.
  2. Go to the “Payments” or “UPI” section.
  3. Select “UPI ID” or “VPA.”
  4. Enter the recipient’s UPI ID and payment amount.
  5. Confirm the payment with the OTP sent to you.
  6. Your payment will be processed, and you’ll receive a confirmation message.

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How UPI Works?

Unified Payment Interface (UPI) is a digital payment system developed by the National Payments Corporation of India. It operates in real-time on internet-enabled smartphones, facilitating seamless money transfers between bank accounts. UPI eliminates the need to share sensitive bank details like account numbers, IFSC codes, and bank names when transferring funds. Most banks in India are part of the UPI network, making it accessible for a wide range of transactions.

Key Features of UPI

Some notable features of UPI include:

  1. Immediate fund transfers around the clock, every day of the year.
  2. Access to multiple bank accounts through a single mobile app.
  3. Single-click, two-factor authentication for secure payments.
  4. Use of a virtual address (VPA) for added security, reducing the need for card numbers or account details.
  5. QR code support.
  6. Convenient withdrawal options without the need for visiting an ATM.
  7. Support for merchant payments, utility bill payments, QR code-based payments, collections, donations, and disbursements.

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Benefits of Using UPI


Now that we’ve explained what UPI is, let’s explore its advantages:

  1. UPI offers a straightforward and efficient e-banking and online payment system.
  2. It enables instant money transfers via your smartphone.
  3. You can use it for various purposes, including paying bills and shopping at local stores.
  4. UPI eliminates the need to carry physical cash.
  5. It minimizes the risks associated with carrying cash.
  6. You don’t need to input the recipient’s bank details when sending money.
  7. Receiving money is as easy as sharing your UPI ID, typically your registered phone number.

Creating a UPI PIN

To create a UPI PIN, follow these steps:

  1. Download the UPI application from your app store or your bank’s website.
  2. Create your profile by providing details like your name, virtual ID (payment address), and password.
  3. Add your bank account number to your virtual ID by accessing the “Add/Link or Manage Bank Account” option.
  4. Choose the bank account from which you wish to initiate transactions.
  5. You will receive three UPI PIN options; select one according to your preference.

Changing Your UPI PIN

To change your UPI PIN:

  1. You will receive an OTP from your issuing bank on your registered mobile number.
  2. Input the final six digits of your debit card number and its expiration date
  3. Input the OTP and set your new numerical UPI PIN.
  4. Click “Submit.”
  5. After submission, you’ll see a pop-up with either “Succeed” or “Reject”; choose “Succeed.”

Using UPI for Transactions

You can use UPI applications to send and receive money seamlessly. Here’s how:

  1. Download a UPI-enabled app (e.g., Paytm, Phonepe, Google Pay) from the Google Play Store or iOS App Store.
  2. Set up your account by providing your mobile number and linking it to your bank account.
  3. To send money, navigate to the ‘Pay to Contact’ option in the UPI Payments tab.
  4. Enter the recipient’s mobile number, select their UPI ID, submit, and input your four-digit UPI PIN.
  5. Both you and the recipient will receive an SMS notification confirming the transaction.

Things to Keep in Mind

  • Both the sender and receiver of money in a UPI transaction must have the same UPI-enabled app on their smartphones.
  • To initiate a money transfer, you need the recipient’s UPI ID.
  • The recipient’s UPI ID can typically be found within your UPI app.
  • You can also send money using the recipient’s phone number, provided it’s linked to their bank account, enabling direct transfers.
  • UPI can be used for payments to grocery stores, merchants, and retailers by scanning their QR codes.
  • It’s a preferred payment option for various online services and apps, including food delivery and shopping platforms.
  • You can receive money by sharing your UPI ID or linked phone number with the sender.

Frequently Asked Questions (FAQ) – About UPI

Q. What is UPI?
Answer. UPI stands for Unified Payment Interface. It is a digital payment system that enables users to make instant money transfers between bank accounts using a single mobile application.

Q. How does UPI work?
Answer. UPI works in real time on Internet-enabled smartphones. Users link their bank accounts to the UPI-enabled app, allowing them to transfer money securely without sharing sensitive bank information like account numbers and IFSC codes.

Q. What can I use UPI for?
Answer. UPI can be used for a variety of purposes, including sending money to friends and family, paying utility bills, shopping online, and making payments at physical stores and restaurants.

Q. Is it safe to use UPI?
Answer. Yes, UPI is considered a secure payment method. It uses encryption and multi-factor authentication to secure transactions. Plus, you don’t need to share your sensitive bank details while making payments.

Q. Can I use UPI for international transactions?
Answer. UPI is mainly for domestic transactions within India. It may not be suitable for international transfers.

Q. How do I create UPI ID?
Answer. To create a UPI ID, download a UPI-enabled app, link your bank account, and follow the app’s instructions to set up your unique UPI ID, usually based on your mobile number.

Q. What is UPI PIN and how do I set it?
Answer. UPI PIN is a secure 4- or 6-digit code used to authorize UPI transactions. You can set your UPI PIN by following the instructions given in your UPI app.

Q. How can I change my UPI PIN?
Answer. To change your UPI PIN, you need to follow the specific procedure mentioned by your UPI app. Typically, this involves entering the OTP you receive from your bank and setting a new PIN.

Q. Can I receive money using UPI?
Answer. Yes, you can receive money through UPI by sharing your UPI ID or linked phone number with the sender. They can use this information to send you money securely.

Q. What are some popular UPI-enabled apps?
Answer. Some of the famous UPI-enabled apps include Google Pay, PhonePe, Paytm, BHIM and Amazon Pay. You can download these apps from the app store of your smartphone.

Q. Is there any limit for transactions with UPI?
Answer. Yes, there are limits on the amount you can transact using UPI. These limits may vary between different banks and UPI apps. It is necessary to check with your bank or app for specific transaction limits.

Q. What should I do if I face problem in UPI transaction?
Answer. If you face any issues such as delays or errors during UPI transactions, you should contact your UPI app or your bank’s customer support for assistance and resolution.

Q. Can I use UPI on my computer or laptop?
Answer. UPI is primarily designed for use on smartphones through dedicated mobile apps. While some banks may provide web-based UPI services, the mobile app is the most common and user-friendly option.

Q. Is UPI available 24/7?
Answer. Yes, UPI transactions can be done 24 hours a day, 7 days a week, including weekends and holidays.

Q. Is UPI available only in India?
Answer. Yes, UPI is a payment system mainly available in India and is used for domestic transactions within the country.


Understanding UPI and its capabilities can completely change the way you handle money online. UPI is user friendly, very fast and very secure. This is making digital payments much better, and you won’t need to depend on old fashioned banks any more. With UPI, your online transactions will be smooth and secure, especially if you do a lot of online banking and money transfers. Friends, how did you like the information about UPI? If you like it then share it with your friends and whatever your opinion is, you can say it by commenting. Thank you.

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