In conversation with Paytm CPO Shreyas Srinivasan: UPI Lite and what it means for the future of digital payments

Digital payments giant Paytm announced in February that it would be enabling UPI Lite services on its platform. For the uninitiated, NPCI (National Payments Corporation of India) had last year revealed a more efficient version of the pre-existing UPI service to conduct smaller transactions. Now Paytm has become the first payment service to make use of this feature and has made it available on Android devices. I sat down with Shreyas Srinivasan, Chief Product Officer at Paytm to discuss the benefits of UPI Lite on Paytm and his thoughts on the service’s wider adoption.

Q: Please explain in your own words how UPI Lite works?

Shreyas: So traditionally UPI transactions have four different parts. There’s your app, your bank, the receiver’s app, and the receiver’s bank. The problem happens when in a traditional UPI transaction the bank on either side is having success rate issues. So to aid that situation you have UPI Lite. It’s an on-device wallet where a relatively small balance is moved from your bank to your app. Then the payment happens from your app to the receiver’s bank account. It’s that simple. It removes that one layer of communication that happens when your app is contacting your bank to get the required funds.

Q: What are the transaction limits on UPI Lite? How is it different from UPI?

Shreyas: So with UPI Lite on Paytm, you can only conduct transactions that are below Rs 200. As mentioned earlier, it works like a wallet and you can store a maximum of Rs 2,000 at a time. However, if you are to exhaust this amount, you can top up with another Rs 2,000 giving you Rs 4,000 as a daily limit on total transactions. You don’t need to enter your UPI PIN while transacting with UPI Lite, which is a big advantage over regular UPI.

Also read: Paytm UPI Lite launched: what it is, how to set it up, everything you need to know about it

Q: How many users are currently using Paytm’s UPI Lite service? What kind of growth are you seeing?

Shreyas: I think these are just early days but we do have a few million users using Paytm UPI Lite already. The average transaction size on Paytm’s UPI Lite service is about Rs 50 to 60 today, so we see it as an integral part of the UPI ecosystem. For users who want to make small value transactions, i.e. under Rs 200, we auto-select UPI Lite for you, and for users who want to make large value payments, the Paytm app will switch to normal UPI. Nearly half of all UPI transactions are under Rs 200 so hopefully, we believe that the introduction of UPI Lite will be the best way to make these transactions successful. Already we are seeing a growth of 30-40 percent in UPI Lite usage every four days since our announcement. We expect this number to keep rising.

Q: Does Paytm plan to increase the transaction value on UPI Lite in the future? 

Shreyas: I think it’ll definitely be considered after a period of six months. These new features are constantly changing and being reviewed frequently. I’m pretty confident that there will be a change in the current maximum transaction value and daily limits. However, at this point, I cannot comment on what those values will be just yet. I can, however, tell you that UPI Lite on Paytm is doing about Rs 3 crores in transactions per day. 

Q) I see that a few of the major banks like ICICI and Axis Bank have still not adopted UPI Lite. When do you see a wider adoption happening?

Shreyas: I believe all the banks are aware that from their own point of view, being on UPI Lite is helpful for them. This is because one of the big things UPI Lite accomplishes is it reduces the load on the banking software of individual banks. That’s been a big problem for banks since a lot of small-value transactions can stress out their digital infrastructure. So I think they’re all incentivised to adopt, and some of the bigger banks have started already. I hope in this quarter most of the bigger banks will make UPI Lite available on their platforms.

Q) Are you planning to go about educating your users on UPI Lite?

Shreyas: Absolutely, every time something new launches we have to educate customers a fair bit. We’ve already started this on our social media and our on-app creatives. Apart from that we also explain the benefits of UPI Lite before the first transaction is made. It is fairly straightforward and I think most people will be able to adopt it quite quickly.

Q) Paytm’s UPI Lite is currently only available for Android users. When do iOS users get it?

Shreyas: It’s currently in the works. India’s smartphone market is majorly on Android so it made sense to first release the UPI Lite functionality there. However, in the next two-three weeks, iPhone users should also be getting it as well.