UPI Limit Increased: Now Pay Over ₹1 Lakh to Merchants in Select Categories

In the present, the amount of a transaction for UPI RBI that covers P2P as well as Person-to-Person (P2P) and payments made to merchants (P2M) is currently set at Rs.1 lakh.

The Reserve Bank of India (RBI) has announced that it will soon update the Unified payment interface (UPI) transaction limits for the payment of money directly to retailers (P2M). It is notable that the limit for transactions individual to individual (P2P) is unaltered at 1 lakh rupees.

"At time of writing the amount of transactions that can be made through UPI which includes the two categories of Person-to-Person (P2P) and person-to-merchant payments (P2M) is limited at 1 lakh rupees, with the exception for certain use situations of P2M payments that have greater limits, with some with a limit of 2 lakh, and some with a limit of Rs. 5 lakh. To allow the ecosystem to react quickly to new scenarios and new needs, it is suggested that NPCI in conjunction with banks and other participants within the UPI ecosystem.

Vishal Maru Global Processing Head, FSS (Financial Software and Systems) Vishal Maru, Global Processing Head of FSS (Financial Software and Systems) "RBI's proposal to allow higher limits for RBI allows NPCI to revise UPI transaction limits will surely be welcomed by the industry. Higher transaction limits for evolving use cases and merchants of different types will foster innovation. The current UPI transaction limits have often been hinderances for certain merchants and businesses to fully make use of UPI while accepting digital payments."

We've asked a number of experts what new uses for UPI might be possible when the Person to Merchant (P2M) limit is raised.

UPI payments to foreign countries could receive higher limits

Most currencies (with certain exceptions) that are able to accept UPI transactions are traded more than Indian Rupees. Hence the limit for transactions determined by the RBI according to Indian Rupees is not sufficient when making international payments. Experts are hopeful that with the higher limits, this gap could be addressed.