Higher UPI Transaction Limits: What You Need to Know

The National Payments Corporation of India (NPCI) has announced a major update to the Unified Payments Interface (UPI). From 15 September 2025, users will be able to make larger payments across select categories, with the per-transaction limit going up to ₹5 lakh in most cases. This change applies only when paying to verified merchants, giving users more flexibility while keeping the system secure.

What’s Changing

Until now, UPI payments were largely capped at ₹1 lakh per transaction, except for special cases like IPOs and insurance premiums (where ₹2 lakh was allowed). With the new guidelines:

• Users can make bigger payments in categories such as capital markets, insurance, travel, and bill payments.
• Verified merchants only: Banks must ensure that merchants are vetted before activating these higher limits.
• Bank-level control: While NPCI has raised the ceiling, banks still have the option to keep lower limits for their users.
• No change for P2P transfers: Sending money to friends or family will continue under the same ₹1 lakh cap.

Categories & Limits (Snapshot)

Some of the key updates include:

• Capital markets, insurance, travel, and government e-Marketplace payments: Now up to ₹5 lakh per transaction, with a ₹10 lakh daily cap.
• Credit card bill payments: Increased to ₹5 lakh, though the daily limit is slightly lower at ₹6 lakh.
• Jewellery purchases: Limited to ₹2 lakh per transaction due to higher fraud risks.
• Digital account opening and FX retail transactions: Also included, with defined caps depending on the use case.

This makes UPI much more versatile, covering everything from high-value insurance premiums to large travel bookings and big-ticket investments.

Why This Matters

The expansion comes at a time when UPI is breaking records month after month. In July 2025, UPI processed over 19.47 billion transactions worth ₹25 lakh crore, and by August, the daily average value had crossed ₹90,000 crore. High-value payments (above ₹50,000) alone have grown by over 24% this year, showing that users increasingly trust UPI for larger spends.

Traditionally, people relied on NEFT or RTGS for such payments. With this change, UPI now provides a faster, 24x7, and more user-friendly alternative for high-value transfers.

Impact on Users

• Investors: No more splitting payments for IPO applications or mutual fund purchases. UPI can now handle them in one go.
• Insurance buyers: Premiums worth up to ₹5 lakh can be paid instantly, avoiding cheque or RTGS hassles.
• Travellers: Flight tickets, holiday packages, or railway bookings worth lakhs can now be paid via UPI without failures.
• Credit card users: A bigger relief for those with high monthly bills, as UPI will now allow up to ₹5 lakh per payment.
• Merchants: Better conversion rates at checkout, especially for big-ticket items.

Risks & Safeguards

While the higher limit brings convenience, it also requires caution:

• Only verified merchants are eligible, ensuring safer transactions.
• Banks can set stricter internal limits for risk management.
• Some categories like jewellery and initial account funding have tighter caps because they are more vulnerable to misuse.
• Users should always double-check merchant UPI IDs when transferring large sums to avoid falling prey to scams.

Expert Outlook

Industry experts believe this move will strengthen India’s digital economy by shifting more high-value transactions to UPI. It will reduce reliance on older systems like NEFT/RTGS and bring more convenience to everyday users. Some reports even suggest that education and healthcare could be next in line for higher UPI limits, possibly up to ₹10 lakh in the future.

Compared globally, this positions UPI ahead of many real-time payment systems such as SEPA in Europe or RTP in the US, showcasing India’s leadership in digital payments.

Bottom Line

With these changes, UPI is no longer just a tool for small transfers or casual payments. It is becoming a serious alternative for high-value transactions, making life easier for investors, travellers, and everyday consumers alike. The only catch: the rollout depends on your bank and UPI app, so keep an eye on updates after 15 September 2025.

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