Overview of the UPI Rule Change
The National Payments Corporation of India (NPCI) has announced a significant update to UPI rules aimed at making digital payments for larger amounts smoother and more convenient. With rising demand for high-value digital transactions, UPI is evolving from a popular consumer tool to a trusted mechanism for paying larger bills, financing, and investment-related payments. The changes are effective from today, and they are designed to curb fraud while simplifying payments for both individuals and institutions.
What Exactly Changed
Key changes focus on higher per-transaction limits and expanded use cases for UPI:
- Per-transaction limit: The basic UPI transaction cap has been raised from 1 lakh to 5 lakh for many payments.
- Daily limit for high-value transfers: Daily high-value transactions are now allowed up to 10 lakh for eligible scenarios, notably under the person-to-merchant (P2M) category for verified merchants and institutions.
- Expanded categories with higher caps: Insurance premiums, loan repayments, travel payments, and capital market investments can now be settled up to 10 lakh per transaction.
- Credit card payments: Credit card bill payments can now be made up to 6 lakh via UPI.
These changes target not just retail shoppers but also businesses and individuals who routinely run higher-value digital transactions.
Who Benefits
The new limits are particularly advantageous for verified merchants and institutions engaged in high-value commerce. This includes insurance providers collecting premiums, lenders processing EMI payments, travel agencies handling high-ticket bookings, and investors making capital market purchases. By enabling larger transfers on a single UPI transaction, NPCI aims to reduce the friction associated with splitting payments or using alternative channels for high-value settlements.
Why NPCI Made the Change
NPCI notes that UPI has become the country’s preferred payment method for a broad range of digital transactions, including high-value ones. The primary goal is to support growing demand for digital payments at scale while maintaining robust security and fraud prevention measures. Making it easier to complete high-value payments helps cash flow for both consumers and businesses, accelerates financial inclusion, and aligns UPI with modern payment needs.
What Stays the Same (Security & Compliance)
Despite the higher limits, the core security and verification norms remain intact. Users must continue to authenticate transactions via two-factor verification, and merchants must follow existing onboarding and security protocols. Banks and payment partners will continue to monitor unusual or fraudulent activity with heightened vigilance, ensuring that convenience does not compromise safety.
Tips for Consumers
- Verify the recipient’s details before authorizing a high-value payment.
- Keep your UPI apps updated to access the latest security features.
- Enable transaction alerts to track large payments in real time.
- Where possible, use verified merchants (P2M) to leverage higher limits securely.
Bottom Line
With limits raised and a broader set of high-value transactions supported on UPI, digital payments in India are set to become even more seamless. Whether you’re paying a loan EMI, settling insurance premiums, or investing in the capital market, these updates are designed to simplify your money moves while maintaining strong safeguards against fraud.
