National Payments Corporation of India increases UPI transaction limit to twice its original limit: India UPI Payments

In a bid to accelerate the growth of the mobile payments space, the National Payments Corporation (NPCI) has decided to double the transaction limit for all Unified Payments Interface (UPI) transactions from the next financial year. It is learnt that the transaction limit for e-payment terminals designated as 'Verified Merchants' in India will be increased to INR 200,000 (approx. INR 18,728) from the current INR 100,000 (approx. INR 9,364).

In a circular sent to member banks of the UPI payments network, the National Payments Corporation (NPC) noted that the increased transaction limits also apply to other large transaction scenarios. This includes capital market investments, bill collections, insurance premium payments, and other pre-approved expenses. However, this increased limit does not apply to peer-to-peer transfers.

The new policy will come into effect from 1 April 2020, according to a notice issued on 3 March.

The National Payments Corporation's notification said, "As UPI is emerging as the preferred mode of payment for the masses, the need to increase the UPI transaction limit is also growing. There is a need to adjust the limit from INR 100,000 to INR 200,000 to cater to many specific usage needs."

As the umbrella organisation responsible for regulating the country's digital payments sector, the National Payments Corporation has notified payment companies and banks to make the necessary changes to "(mobile) apps and applications." The notification also states that the National Payments Corporation will consider increasing the limits for additional categories as necessary.

Another important reason for this move is that recently major Indian UPI players such as PhonePe and Paytm have started venturing into the financial services space, offering services related to insurance and mutual funds as per the needs of their customers.

Hemant Gala, Vice President, Payments and Financial Services, PhonePe, said, "Increasing transaction limits for financial purposes such as mutual funds, insurance and credit card repayments, as well as for verified merchants, will help boost customer confidence in using UPI. I am excited about this change and will work to ensure that our merchants and customers benefit from this policy update."

In addition, these companies are deploying QR code payment and POS devices in retail shops across the country to expand the number of verified merchants.

Since October last year, UPI has exceeded 1 billion transactions per month. According to the latest data from February, the volume has reached a record 1.32 billion transactions, which is the highest monthly volume since August 2016, when the system went live.

This article was translated from "NPCI to double UPI transaction limit at stores run by verified merchants."

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