Introduction
The National Payments Corporation of India (NPCI) has recently announced an update to the Unified Payments Interface (UPI) limits, which has a significant impact on how high-value digital payments are processed in India. Effective now, users can make Person-to-Merchant (P2M) transactions of up to ₹5 lakh per transaction, and a maximum of ₹10 lakh in total within 24 hours for specified categories. This update changes how UPI will handle large payments and has been designed to make digital transactions more efficient, secure, and accessible for users across various sectors.
Key Changes To UPI Transaction Limits
1. Per-Transaction Limit for P2M Transactions Increased to ₹5 Lakh
The single transaction limit for Person-to-Merchant (P2M) transactions has now been raised to ₹5 lakh in specified categories. Previously, the limit for such transactions was much lower, but this change enables businesses in specific industries to accept higher-value payments without relying on multiple smaller transactions.
2. Daily Aggregate Limit Raised to ₹10 Lakh in Select Categories
In addition to the raised per-transaction limit, the daily aggregate limit for P2M transactions has been increased to ₹10 lakh within 24 hours for specific categories, including:
- Insurance premiums
- Capital markets
- Travel
- Collections
- Government e-Marketplace (GeM)
This revision allows users to conduct more extensive daily transactions, supporting businesses that need to process large payments over a day. For instance, in the insurance sector, where large premium payments are common, companies can process these payments in a single day without requiring multiple smaller transactions.
3. P2P Transfer Limit Remains at ₹1 Lakh per Day
Despite the increase in transaction limits for P2M payments, the limit for Person-to-Person (P2P) transfers remains unchanged at ₹1 lakh per day. This helps maintain a clear distinction between personal transfers and commercial transactions, ensuring that high-value commercial transactions are subject to stricter conditions. On the contrary, personal transfers stay within a manageable limit.
4. Investment Payments in Capital Markets and Insurance Increased
For capital market investments and insurance premiums, the per-transaction limit has been raised from ₹2 lakh to ₹5 lakh, with a daily aggregate limit of ₹10 lakh. This will benefit investors, particularly those looking to make significant investments, by offering more room for digital transactions, eliminating the need to break down payments into multiple smaller ones.
5. GeM and Government Transactions Raise Transaction Limits
The Government e-Marketplace (GeM), which facilitates procurement by government departments, now has an increased transaction limit for payments such as tax payments, earnest money deposits, and other government-related transactions. Previously capped at ₹1 lakh, the per-transaction limit has now been increased to ₹5 lakh, simplifying and streamlining government transactions that often involve substantial sums.
6. Credit Card Bill Payments Now Higher
The transaction limit for credit card bill payments has also been raised to ₹5 lakh per transaction, with a daily cap of ₹6 lakh. This change offers more flexibility for consumers who need to make large credit card payments, whether for personal use or business expenses.
Increased UPI Limit Benefits On Businesses And Consumers
A. Impact on Businesses
- Increased Flexibility for High-Value Transactions
This update brings significant flexibility for businesses, especially those in the capital markets, insurance, travel, and e-commerce sectors. Businesses can now process higher-value transactions more easily without splitting payments into smaller amounts. This is particularly helpful for industries like insurance, where premiums can often exceed the previous limits. - Faster and Smoother Payment Flow
With the ability to accept higher-value transactions, businesses can offer smoother payment experiences to their customers. This reduces friction in the payment process, allowing businesses to close deals faster and improve cash flow. - Simplified Compliance and Reporting
The new limits provide an opportunity for businesses to streamline their compliance processes. With the ability to conduct more substantial transactions within a single window, companies can focus on fewer transactions, reducing the need for complex reporting and reconciliation tasks.
B. Impact on Consumers
- Increased Convenience for High-Value Transactions
Consumers will find it easier to complete large payments in sectors like insurance and capital markets, where high-value transactions are the norm. With the higher limits, they no longer have to split payments into multiple parts, making the process more efficient and less time-consuming. - Improved Payment Security
The revised transaction limits are designed to accommodate large payments without compromising security. With verified merchants required for specified categories, the risk of fraud or error in high-value transactions is reduced.
How Authbridge Can Support Businesses With The New UPI Updates
As businesses adapt to these changes to UPI transaction limits, AuthBridge can help ensure that compliance, fraud prevention, and merchant verification processes are streamlined.
1. Merchant Verification and KYC Services
For businesses handling larger payments, merchant verification becomes even more critical. AuthBridge’s merchant verification services, including Know Your Business (KYB) and KYC checks, help businesses deal with verified and trustworthy merchants. This is especially important as the scale of transactions increases in the insurance, capital markets, and e-commerce sectors.
2. Compliance with Regulatory Requirements
AuthBridge’s AML (Anti-Money Laundering) and KYC services ensure businesses comply with regulations while conducting large transactions. As transaction limits rise, the need for comprehensive background checks to verify the identity of merchants and customers becomes even more critical.
3. Fraud Prevention Tools
With higher-value transactions, the potential for fraud also increases. AuthBridge’s fraud prevention tools, such as UPI verification, address verification, and contact point verification (CPV) powered by DIGIPIN, ensure that merchants and consumers are thoroughly verified before engaging in large-value transactions. This helps businesses protect themselves from fraudulent transactions and reduce the risk of financial loss.
Conclusion
With verified merchants now eligible for larger transaction amounts, businesses in sectors such as insurance, capital markets, travel, and GeM will find it easier to process large payments without compromising security or efficiency. For businesses looking to take advantage of these changes, AuthBridge’s services can play a major role in ensuring that all necessary verification, compliance, and fraud prevention measures are in place.
