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With the rise of financial inclusion and digital transformation, the National Payments Corporation of India (NPCI) is now introducing UPI Lite, a groundbreaking feature that enables small-value digital payments without the need for an active internet connection. As announced by the Reserve Bank of India (RBI) on January 5, users can make digital transactions of up to ₹200 through this offline mode.
UPI Lite is designed especially for feature phone users who may not have constant internet access. It enables these users to connect to the UPI network and initiate payments directly from their bank accounts through SMS-based communication.
There are two primary technologies under consideration:
SIM Overlay Technology: This method enhances the SIM card’s capabilities, allowing transactions to be processed even without data connectivity.
Over-the-Air (OTA) Updates: This software-driven approach pushes updates directly to the phone’s firmware to enable offline functionality.
Users will need to set a 4- or 6-digit PIN based on their bank’s protocol. Payments initiated via SIM overlay are routed through NPCI’s UPI system, with transactions executed over the SMS network—completely bypassing the internet.
Since the 2016 demonetisation, India has witnessed an explosion in digital payments. In fact, Tier-II and Tier-III cities made up more than 50% of online transactions in early 2021. Yet, rural areas and smaller towns still rely heavily on cash.
UPI Lite can bridge this gap by offering a secure, low-cost, and offline payment mode, creating a near-cash experience for everyday retail transactions. From buying bus tickets to small grocery items, UPI Lite opens up multiple use cases for micro-payments—even in low-connectivity zones.
Considering feature phones still account for nearly half of mobile usage in India, UPI Lite has the potential to significantly boost digital payment adoption in underbanked regions.
While this isn’t NPCI’s first attempt at offline transactions—having launched USSD-based UPI payments in 2012—the earlier system faced barriers like SMS costs and limited adoption. Still, over 83 banks were on board with USSD as of December 2021, though total transaction volumes remained low.
Now, with better infrastructure and increased digital awareness, over 350 million feature phone users stand to benefit from UPI Lite, if trials prove successful.
As India accelerates toward financial inclusion, solutions like UPI Lite mark a major step forward in democratizing access to digital payments. For this movement to succeed at scale, the backend infrastructure must be robust, scalable, and regulatory-aligned.
That’s where CARD91 comes in.
At CARD91, we build powerful and flexible payment infrastructures that support digital innovation across India. From UPI acquiring to device-agnostic SDKs, our solutions are engineered to help banks, fintechs, and payment facilitators seamlessly onboard merchants and enable secure transactions—online or offline. As UPI Lite gains momentum, CARD91 is ready to power the next wave of inclusive digital payment experiences.
To know more about our offerings connect with our experts
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