How UPI Lite can do the heavy lifting for NPCI in low-value transactions, and unburden banks systems

Image courtesy of Paytm.

Synopsis
As UPI aspires to do a billion transactions per day, a lot rides on whether it can ensure lower payment failures. UPI Lite is designed to achieve that by unburdening the core software systems of the banks that are hit by every single minor transaction. However, the rollout has been slow, and it is too early to predict its impact.

Every success comes at a price. And in the case of Unified Payments Interface (UPI), it is the banks and their creaky legacy systems that have paid for the instant digital-fund transfer platform’s rousing success. Since its launch in 2016, UPI has grown exponentially — from a modest 2.65 million in the beginning to a whopping 83 billion annual transactions in FY23. Now, the National Payments Corporation of India (NPCI), which owns and operates