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The National Payments Corporation of India (NPCI) has increased the limit for Unified Payments Interface (UPI) transactions to ₹ 5 lakh for certain types of payments. This change, effective from September 16, is set to bring greater flexibility and convenience to users who make high-value transactions through UPI.
The standard UPI transaction limit has been ₹ 1 lakh per transaction, with a slightly higher limit of ₹ 2 lakh for specific categories such as capital markets, collections, insurance and foreign inward remittances. The new measure, as outlined in an NPCI circular dated August 24, will see this limit increase to ₹ 5 lakh for transactions related to tax payments, payments to hospitals and educational institutions and investments in IPOs and RBI retail direct schemes.
According to the NPCI circular, "to enable this enhancement" the following conditions must be met:
Banks, payment service providers (PSPs) and UPI apps must update the per-transaction limit for categories of verified merchants as specified in the annexure.
Acquiring entities are required to ensure that merchants classified under 'MCC-9311' are exclusively handling tax payments. They must add these entities to the 'Verified Merchant' list only after thorough due diligence.
Merchants must enable UPI as a payment option for transactions up to the new limit specifically for tax payments.
The NPCI's decision to increase the UPI transaction limit stems from the growing popularity of the payment method in India. "With UPI emerging as a preferred payment method, there is a need to enhance the per transaction limit in UPI for specific categories," the NPCI stated in its circular.
The organisation has urged all stakeholders in the payments ecosystem, including banks, payment service providers and UPI apps to ensure their systems are updated to accommodate the new transaction limits.
Post a comment This enhancement is expected to streamline high-value transactions and provide more options for users engaging in substantial financial activities. To ensure smooth transactions under the new limit, users are advised to verify with their banks and UPI service providers whether the increased limit applies to their specific transactions.
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