UPI New Rules: NPCI Revises Transaction Limits for PhonePe, GPay, Paytm

Starting September 15, 2025, India’s Unified Payments Interface (UPI) will allow significantly higher payments for select merchants in high-value sectors. The National Payments Corporation of India (NPCI) has revised transaction limits, particularly for payments in insurance, investments, travel, and credit card bills. This move aims to streamline high-value digital payments, enhance convenience, and accelerate digital adoption among consumers and businesses.

What Changes Are Being Implemented?

The key changes focus on Person-to-Merchant (P2M) transactions. Verified merchants in specified categories will now allow:

• Per transaction limit: Up to ₹5 lakh

• Daily cap: Up to ₹10 lakh

Fintech experts have welcomed this decision. Akash Sinha, CEO & Co-founder of Cashfree Payments, said, “Raising UPI limits to ₹5 lakh per transaction and ₹10 lakh per day is a timely move that addresses real challenges for businesses handling high-value payments.”

Sector-Specific Updates

Insurance and Capital Markets

• Previous limit: ₹2 lakh per transaction

• New limit: ₹5 lakh per transaction

• Daily cap: ₹10 lakh

Government e-Marketplace (GEM) Transactions

For payments like earnest money deposits and taxes:

• Previous limit: ₹1 lakh per transaction

• New limit: ₹5 lakh per transaction

Travel Bookings

• Previous per transaction limit: ₹1 lakh

• New limit: ₹5 lakh

• Daily cap: ₹10 lakh

Credit Card Bills and Loan/EMI Collections

Limits for credit card and loan payments have also been relaxed, making digital payments more efficient for large sums.

Jewellery Purchases

• Previous per transaction limit: ₹1 lakh

• New limit: ₹2 lakh

• Daily cap: ₹6 lakh

Person-to-Person (P2P) Transactions

• No change: Daily limit remains ₹1 lakh

Benefits of Higher UPI Transaction Limits

Enhanced Convenience

Previously, paying large amounts often required splitting transactions or using traditional methods like cheques and bank transfers. The new limits allow instant high-value payments, reducing delays and hassle.

Boost for Digital Adoption

By enabling large transactions digitally, the changes encourage more users and businesses to adopt UPI for high-value payments, including insurance, investments, and travel.

Improved Experience for Businesses and Merchants

Merchants in high-value sectors can expect:

• Fewer failed or incomplete transactions

• Reduced drop-offs at checkout

• Improved customer satisfaction due to seamless payment experience

Safeguards and Precautions

Merchant Verification

• Higher limits apply only to verified merchants in specified categories.

• Not all merchants will automatically qualify.

Enhanced Security

• Multi-factor authentication for large transactions

• Monitoring for suspicious activity

• Strict merchant verification to mitigate risks

Automatic Activation

• Users do not need to enable the higher limit manually.

• Once a merchant is verified, the new limit applies automatically.

Challenges and Considerations

User Concerns

• Some users may hesitate to transact very large sums digitally due to fraud fears or security concerns.

Merchant Eligibility

• Only verified merchants can offer higher limits, meaning traditional limits may still apply in many cases.

Technical Readiness

• Banks, payment apps, and UPI-interface devices must support the new limits smoothly to prevent transaction failures.

Conclusion

NPCI’s decision to raise UPI transaction limits is a significant step toward making high-value digital payments easier and safer in India. Individuals regularly paying for insurance, travel, investments, or credit card bills will benefit from faster, simpler transactions. This change highlights the maturing digital payments infrastructure, making it capable of handling both small and large transactions efficiently.