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India’s digital payment ecosystem is gearing up for a major upgrade. Starting September 15, 2025, the Unified Payments Interface (UPI) will implement new transaction rules that significantly raise payment limits across key sectors. The National Payments Corporation of India (NPCI) has announced these changes to accommodate the growing demand for high-value digital transactions, especially in areas like insurance, capital markets, travel, and government services.
This move is expected to streamline large payments, reduce reliance on traditional banking methods, and further cement UPI’s role as the backbone of India’s cashless economy.
Key Highlights of the New UPI Rules
The per-transaction limit for select merchant categories has been increased to ₹5 lakh.
Daily transaction caps for these categories now extend up to ₹10 lakh.
Person-to-person (P2P) transactions remain capped at ₹1 lakh per day.
These changes apply to verified merchants and specific sectors, not general retail transactions.
Sector-Specific Changes and Implications
Insurance and Capital Market Investments
Previous limit: ₹2 lakh per transaction
New limit: ₹5 lakh per transaction, ₹10 lakh daily cap
Impact: Easier premium payments and investment subscriptions without splitting transactions or reverting to NEFT/RTGS.
Government e-Marketplace (GeM) and Tax Payments
Previous limit: ₹1 lakh per transaction
New limit: ₹5 lakh per transaction
Impact: Faster processing of earnest money deposits, tax dues, and procurement-related payments.
Travel Bookings
Previous limit: ₹1 lakh per transaction
New limit: ₹5 lakh per transaction, ₹10 lakh daily cap
Impact: Seamless booking of high-value travel packages, group tours, and corporate travel arrangements.
Credit Card Bill Payments and Loan Collections
New limit: ₹5 lakh per transaction, ₹6 lakh daily cap
Impact: Simplifies repayment of large credit card bills and EMIs via UPI, reducing dependency on net banking.
Jewellery Purchases
Previous limit: ₹1 lakh per transaction
New limit: ₹2 lakh per transaction, ₹6 lakh daily cap
Impact: Supports high-value retail purchases in the luxury segment, especially during festive seasons.
Business and Merchant Transactions
New limit: ₹5 lakh per transaction
No fixed daily cap, offering flexibility for enterprise-level payments
Impact: Enhances operational efficiency for merchants handling bulk orders and supplier payments.
Digital Account Opening
New limit: ₹5 lakh per transaction and per day
Impact: Facilitates onboarding and initial funding of digital accounts with fewer constraints.
Why This Matters for Users and Businesses
Convenience: Users no longer need to split large payments or switch to slower banking methods.
Speed: Real-time processing of high-value transactions improves cash flow and reduces delays.
Security: UPI’s robust authentication protocols ensure safe handling of larger sums.
Adoption: These changes are expected to boost UPI usage in underpenetrated segments like insurance and capital markets.
Fintech Industry Reaction
Akash Sinha, CEO of Cashfree Payments, called the move timely and essential for businesses managing high-value transactions.
Fintech platforms like PhonePe, Google Pay, and Paytm are updating their systems to reflect the new limits, ensuring a smooth transition for users.
Conclusion
The revised UPI rules mark a pivotal moment in India’s digital finance journey. By expanding transaction limits across strategic sectors, NPCI is not just responding to market demand—it’s shaping the future of how India pays. Whether it’s booking a luxury vacation, investing in mutual funds, or paying a hefty insurance premium, UPI is now equipped to handle it all with speed, security, and simplicity.
Sources: Financial Express, Economic Times, India TV News
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