Summary of this article
UPI transaction limit raised to Rs 5 lakh.
High-value payments include taxes, insurance, investments, travel.
Verified merchants and bank rules affect new limits.
The National Payments Corporation of India (NPCI) has raised the Unified Payments Interface (UPI) transaction limits, enabling customers to make up to Rs 5 lakh payments per transaction under certain categories. The change will be effective from September 15, 2025, and it's in an effort to facilitate smoother and more convenient high-value digital payments.
Major UPI Transaction Rule Changes
In the new structure, types of payments like tax payments, insurance, investment in capital markets, government e-marketplace purchases, and big travel or merchant purchases will now permit transactions of up to Rs 5 lakh at a time. Previously, all UPI transactions were limited to Rs 1 lakh, except for a few like hospital and education fees, which were permitted up to Rs 5 lakh.
For some categories like insurance and capital markets, even the cumulative 24-hour limit has been raised to Rs 10 lakh. This implies that one can make multiple payments in a day under these categories, provided the cumulative value does not go beyond the new cap.
Categories Eligible for the Increased Limit
Government e-marketplace purchase payments, travel bookings worth high amounts, insurance premiums, purchases of mutual funds or stocks, and credit card bill payments all come under the new categories. Business-to-merchant payments and high-value jewellery purchases are also eligible, though different banks and merchant compliance with NPCI norms might have varying limits.
But digital opening of account and first-time funding is still capped at Rs 2 lakh per transaction. Even peer-to-peer transfers between individuals do not fall within the improved framework and will still have the prevailing limits.
Verified Merchants: A Key Requirement
The new limits will only go for merchants who are rated as "Verified" under NPCI guidelines. Users must verify that the merchant with whom they are conducting the transaction is compliant or else the higher ceiling may not apply.
Besides, acquiring banks that onboard such merchants still have the power to put higher internal limits. For example, even though NPCI may permit Rs 5 lakh, a bank can choose to give its customers a lower limit based on risk factors.
What This Means for Users
The higher caps are likely to please persons undertaking high-value digital transactions, including mass travel bookings, large tax payments, or large insurance premiums. Capital market investors will also be able to undertake transactions of high value without needing to divide payments.
At the same time, customers are advised to check both merchant status and their bank's internal policies before relying on the new thresholds. The changes highlight NPCI's focus on positioning UPI not just as a small-value convenience tool but also as a platform for large, secure, and high-frequency payments.
