The National Payments Corporation of India (NPCI) has announced a major reform in the Unified Payments Interface (UPI) framework, increasing the per-transaction limit for Person-to-Merchant (P2M) payments in select high-value categories to ₹5 lakh, with a daily cumulative cap of up to ₹10 lakh in some cases.
This marks a significant leap from the previous limits of ₹1 lakh (or ₹2 lakh in specific cases) and signifies UPI’s evolution from small-value transfers to a robust platform for large-scale, high-value commerce.
Key Highlights of the New UPI Rules
The revised limits apply exclusively to verified merchants and select sectors, while Person-to-Person (P2P) transfers remain capped at ₹1 lakh per day.
| Category | New Per-Transaction Limit | Daily Cumulative Limit | Impact |
|---|---|---|---|
| Capital Markets (Investments) | ₹5 Lakh | ₹10 Lakh | Enables seamless investments in Mutual Funds, IPOs, and Equities. |
| Insurance Premiums | ₹5 Lakh | ₹10 Lakh | Allows quick, high-value insurance payments without delays. |
| Government e-Marketplace (GeM) | ₹5 Lakh | ₹10 Lakh | Simplifies payments like Earnest Money Deposits and government taxes. |
| Travel & Tourism | ₹5 Lakh | ₹10 Lakh | Eases large payments for premium flight tickets and travel packages. |
| Credit Card Bill Payments | ₹5 Lakh | ₹6 Lakh | Makes settling high-value monthly bills more convenient. |
What This Means for Users
The new transaction ceiling provides greater flexibility and speed for both consumers and businesses:
- Investors can now execute large SIPs or lump-sum investments instantly via UPI instead of splitting payments.
- Policyholders can pay hefty annual or quarterly insurance premiums seamlessly, avoiding RTGS or cheque processing delays.
- Businesses and Taxpayers can make instant, verified payments for government dues, tenders, or marketplace transactions.
- Travelers can complete big-ticket bookings for hotels or international flights through a single UPI transaction.
Strengthening India’s Digital Payment Ecosystem
This decision underscores NPCI’s commitment to expanding UPI’s role as the backbone of India’s digital economy. By embracing large-value transactions, UPI is now set to challenge traditional payment channels like NEFT and RTGS for routine high-value transfers.
Key Benefits
- Transparency: Digital trail enhances tracking and compliance, especially in financial and insurance sectors.
- Efficiency: Eliminates dependence on time-restricted systems, allowing 24×7 high-value transactions.
- User Convenience: Simplifies complex, high-value payments through a secure, instant platform.
Implementation & Future Outlook
The rollout of enhanced limits will depend on banks and payment service providers updating their systems. Users are advised to update their UPI apps to enable the new transaction thresholds.
With this move, UPI cements its position as a global FinTech benchmark, reinforcing India’s leadership in real-time digital payments innovation and advancing the government’s vision of a cashless, fully digital economy.
