Source: NPCI
The National Payments Corporation of India (NPCI) has released an addendum to its earlier circular on higher UPI limits. The latest update introduces enhanced per-transaction and daily aggregate limits for multiple categories of Person-to-Merchant (P2M) transactions, effective 15 September 2025.
This decision is aimed at enabling seamless high-value digital payments for investments, insurance, government services, travel, and more, without forcing customers to split transactions.
Key Highlights of the Circular
- Effective Date: 15 September 2025
- Scope: Applies only to P2M payments made to verified merchants in specified categories
- No Change in P2P: Person-to-Person (P2P) transaction limit remains ₹1 lakh/day
- Higher Ceilings:
- Per-transaction limit raised up to ₹5 lakh
- Daily aggregate limit raised up to ₹10 lakh in most cases
- Merchant Verification is Mandatory: Only merchants classified and verified under specific categories can accept payments beyond standard UPI limits
- Bank Discretion: While NPCI sets maximum limits, banks and PSPs may set lower caps as per their internal risk policies
- Mandatory Compliance: All UPI participants (banks, PSPs, TPAPs, apps) must implement changes by 15 September 2025
What Remains Unchanged
While specific merchant categories receive enhanced limits, peer-to-peer (P2P) transfers maintain their existing cap of ₹1 lakh per day, ensuring consumer protection for individual transactions remains intact.
Implementation Timeline and Process
The enhanced limits became effective on September 15, 2025, following NPCI’s circular dated August 28, 2025. Banks and payment service providers have been implementing these changes across their UPI-enabled applications and services.
Individual banks retain the authority to set transaction limits within these new maximums based on their risk management policies and regulatory compliance requirements.
Table: NewUPI Transaction Limits (Effective 15 Sept 2025)
| Category | Merchant Category Identifier | New Per-Transaction Limit | New 24-Hour Aggregate Limit |
|---|---|---|---|
| Capital Markets (e.g., investments) | 6211 | ₹5 lakh | ₹10 lakh |
| Insurance Payments | 5960, 6300,6529 | ₹5 lakh | ₹10 lakh |
| Government e-Marketplace (Tax, EMD) | 9311 | ₹5 lakh | ₹10 lakh |
| Travel | 4722 | ₹5 lakh | ₹10 lakh |
| Credit Card Bill Payments | 5413 | ₹5 lakh | ₹6 lakh |
| Collections (EMI, loan, B2B, etc.) | 7322 | ₹5 lakh | ₹10 lakh |
| Business / Merchant (pre-approved) | Payer MCC shall not be 0000/, Purpose Code: 20 | ₹5 lakh | — |
| Jewellery Purchases | 5944 | ₹2 lakh | ₹6 lakh |
| FX Retail via BBPS | MCC-6012, Purpose Code- BF(New Propose Code for regular UPI Transactions), Purpose Code-01 (For One Time Mandate) | ₹5 lakh | ₹5 lakh |
| Term Deposit (digital account) | 7410 (New MCC) | ₹5 lakh | ₹5 lakh |
| Initial Funding for Digital Account | 7409 (New MCC) | ₹2 lakh | ₹2 lakh |
Why This Matters
- Investors: Easier to make large capital market or mutual fund investments in one go.
- Policyholders: Can pay hefty insurance premiums without splitting payments.
- Travelers: High-value bookings for flights, hotels, and tours get smoother.
- Merchants: Businesses in select categories benefit from faster, higher-value collections.
- Consumers: Less friction, no need for multiple UPI transfers.
Strategic Impact on Digital Payments
This expansion addresses several critical market needs:
Enhanced Consumer Convenience: Users can now complete high-value transactions like insurance premium payments, luxury purchases, and travel bookings through UPI without splitting transactions or switching to alternative payment methods.
Business Growth Enablement: Merchants in affected categories can now accept larger UPI payments, potentially increasing sales conversion rates and reducing payment processing complexity.
Financial Inclusion Advancement: The move strengthens UPI’s position as India’s primary digital payment infrastructure, accommodating increasingly sophisticated financial needs of consumers and businesses.
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