Pay Larger Bills with UPI! NPCI Raises Transaction Cap to ₹5 Lakh for Select Payments…Details Here

The National Payments Corporation of India (NPCI) has increased the transaction limit for certain UPI payments to ₹5 lakh, aiming to enhance convenience for users.

Typically, UPI transactions have a limit of ₹1 lakh per transaction, with certain categories like capital markets, insurance, collections, and foreign remittances allowed a daily limit of ₹2 lakh.

However, with this new directive NPCI has now expanded the upper limit to ₹5 lakh for specific transactions, making large payments more accessible through the UPI platform.

UPI TRANSACTION LIMIT INCREASED TO ₹5 LAKH

According to a circular from NPCI dated August 24, 2024, this change has been made in response to UPI's growing popularity as a preferred payment method in India.

The higher limit will apply to payments for tax-related purposes, certain hospital and educational institution transactions, IPOs, and RBI retail direct schemes. The new limit is expected to take effect from Monday, September 16, 2024.

This increase comes as a significant development for users making large payments, such as tax payments, allowing them to complete their transactions in one go, without needing to split them into multiple payments.

The NPCI has instructed banks, payment service providers, and UPI app providers to ensure compliance with the new transaction limit by Sunday, September 15, 2024.

SUBSTANTIAL RISE OF UPI PAYMENTS IN INDIA & BEYOND

India has seen a substantial rise in the use of UPI as a primary payment method. The National Payments Corporation of India (NPCI) reported a 45% annual growth in UPI payments. In July 2024, transaction values reached ₹20.64 trillion, having grown by more than 35%.

For the third time in a row, the amount exceeded ₹20 trillion in this month. ₹20.07 trillion and ₹20.44 trillion, respectively, were transacted through UPI in June and May.

The average daily transaction value was ₹66,590 crore, or ₹466 million, in July 2024. With 55.66 billion transactions, UPI has transacted a total of ₹80.79 trillion so far this fiscal year.

However, not all users may immediately benefit from the increased limit. The transaction limit will depend on whether the merchant is verified and whether the user's bank has updated its UPI transaction policies accordingly.

SOME BANKS MAY NOT ALLOW PAYMENTS YET

While some banks allow higher UPI transaction limits, others may still impose their own restrictions.

For instance, Allahabad Bank currently has a UPI transaction limit of ₹25,000 per day, as shown by Google Pay. On the other hand, HDFC Bank and ICICI Bank allow transactions of up to ₹1 lakh for peer-to-peer payments.