The National Payments Corporation of India (NPCI) has officially enhanced UPI transaction limits for certain merchant categories, effective 15 September 2025. This move comes after growing demand from the financial ecosystem for smoother high-value payments through UPI.
A circular dated 28 August 2025 (Operating Circular OC-185B) confirms that verified merchants in categories such as capital markets, insurance, travel, credit card bill payments, and others will now enjoy higher payment ceilings. This decision reflects UPI’s rising role as India’s most trusted digital payments system and its growing adoption for both personal and business use cases.
Why Higher Limits Were Introduced
UPI has become the backbone of India’s real-time digital payments, processing billions of monthly transactions across retail, business, and government services. Initially designed for small-value retail transactions, UPI gradually evolved into a platform for a wide variety of financial activities, including investments, insurance premiums, and utility bill payments.
As customer behavior shifted and merchants sought more flexibility, NPCI received industry requests to expand the transaction ceilings. The enhanced limits are intended to:
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Facilitate large-value financial activities such as stock market trades, tax payments, and insurance premiums.
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Enable seamless travel bookings, where ticketing often exceeds the earlier standard limit of ₹1 lakh.
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Simplify credit card repayments and high-value EMI collections.
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Support business-to-merchant (B2M) payments, especially in wholesale and enterprise scenarios.
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Allow digital account funding and foreign exchange use cases through the BBPS platform.
This expansion ensures that UPI continues to serve not just as a tool for day-to-day retail payments but also as a channel for high-value, verified, and secure merchant transactions.
Summary Table
Parameter |
Details |
|---|---|
Effective Date |
15 September 2025 |
Key Categories |
Capital markets, insurance, travel, credit card bills, business, jewellery |
Highest Per Transaction Limit |
₹5 lakh |
Lowest Per Transaction Limit |
₹2 lakh |
Maximum Daily Cap |
₹10 lakh (category specific) |
Merchant Type |
Verified merchants only |
P2P Transactions |
Unchanged (₹1 lakh daily limit) |
Bank Flexibility |
Can set lower limits within NPCI’s ceilings |
Official Source |
New UPI Limits by Category
The enhanced transaction limits vary across categories, ranging between ₹2 lakh and ₹5 lakh per transaction. In some cases, NPCI has also introduced cumulative daily ceilings. Below is the detailed matrix:
Category |
Per-Transaction Limit |
Daily (24-Hour) Limit |
|---|---|---|
Capital Markets (Investments, Brokerages) |
₹5 lakh |
₹10 lakh |
Insurance (Premiums, Policies) |
₹5 lakh |
₹10 lakh |
Government e-Marketplace & Tax Payments |
₹5 lakh |
₹10 lakh |
Travel (Air, Rail, Tours) |
₹5 lakh |
₹10 lakh |
Credit Card Bill Payments |
₹5 lakh |
₹6 lakh |
Collections (Loan EMIs, B2B Receivables) |
₹5 lakh |
₹10 lakh |
Business/Merchant Payments |
₹5 lakh |
No daily cap |
Jewellery Purchases |
₹2 lakh |
₹6 lakh |
FX Retail (via BBPS Platform) |
₹5 lakh |
₹5 lakh |
Digital Account Opening – Term Deposit |
₹5 lakh |
₹5 lakh |
Digital Account Opening – Initial Funding |
₹2 lakh |
₹2 lakh |
Key points to note:
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Most merchant categories now support ₹5 lakh per transaction.
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For capital markets, insurance, travel, and collections, the daily cap is ₹10 lakh.
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Jewellery and initial funding remain lower due to risk considerations.
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Business/merchant category has no daily cap, providing the most flexibility.
Who Can Use the Higher Limits
The new limits are not universal. They apply only to verified merchants who meet NPCI’s compliance requirements. Acquiring member banks and payment service providers (PSPs) are responsible for ensuring that merchants fall under approved categories before activating higher limits.
Banks also retain the right to apply stricter controls based on their own risk policies. For example, even if NPCI sets ₹5 lakh as the cap, a bank may choose to restrict payments to ₹3 lakh if deemed necessary.
It is also important to note that these changes apply only to Person-to-Merchant (P2M) transactions. Peer-to-Peer (P2P) payments remain capped at ₹1 lakh per day.
Implementation Timeline
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NPCI Circular Issued: 28 August 2025
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Deadline for Banks & PSPs: 15 September 2025
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Applicability: All UPI-enabled apps, PSPs, and member banks must comply from the effective date.
Frequently Asked Questions (FAQs)
Q1. When will the new UPI limits come into effect?
A. The higher transaction limits will be applicable from 15 September 2025.
Q2. Do these limits apply to all UPI payments?
A. No. They apply only to Person-to-Merchant (P2M) transactions with verified merchants. Peer-to-Peer (P2P) transfers remain capped at ₹1 lakh per day.
Q3. Will my bank allow the full ₹5 lakh per transaction?
A. Not always. Banks can impose stricter limits for security reasons, even though NPCI allows up to ₹5 lakh.
Q4. Why are jewellery and initial funding capped at ₹2 lakh?
A. These categories carry higher fraud and misuse risks. NPCI has therefore kept their limits more conservative.
Q5. How do I know if a merchant is verified?
A. Verified merchants are approved under NPCI’s guidelines. UPI apps and banks typically label such merchants clearly.
Q6. What about business transactions?
A. Business/merchant transactions can go up to ₹5 lakh per payment, and unlike other categories, they do not have a daily cumulative cap.
Q7. Where can I read the official circular?
A. You can access the circular here: NPCI Circular OC-185B.
Conclusion
The decision to raise UPI limits for specific merchant categories reflects NPCI’s commitment to keeping UPI relevant and future-ready. With digital adoption accelerating across sectors, larger transaction ceilings are essential for enabling seamless, safe, and high-value transactions.
By balancing higher limits with strict compliance rules, NPCI ensures that UPI remains both inclusive for users and secure for financial institutions.
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