Can You Now Make UPI Payments Up to ₹10 Lakh?

UPI – The National Payments Corporation of India (NPCI), the driving force behind the Unified Payments Interface (UPI), has made a landmark announcement that marks a new chapter for digital payments in the country. In a strategic move to position UPI as a versatile tool for both everyday and high-value transactions, the daily transaction limit for Person-to-Merchant (P2M) payments has been substantially increased to ₹10 lakh for select, verified merchants. This major change, which takes effect from September 15, 2025, is set to transform how businesses and consumers handle larger financial dealings.

This is a monumental shift from the existing framework, where the standard daily limit for most UPI transactions was capped at ₹1 lakh. The NPCI’s decision is a direct response to the growing demand from the market to extend UPI’s capabilities to more diverse and high-value use cases. While this is fantastic news for businesses and consumers engaged in significant transactions, it’s critical to note that the daily limit for Person-to-Person (P2P) transfers—money sent between individuals—will remain unchanged at ₹1 lakh. This distinction is a deliberate and crucial measure to ensure the continued security and integrity of personal financial transfers.

A Clear Distinction: P2M vs P2P

The new rules are meticulously designed to expand the utility of UPI without compromising its core principles of security and simplicity. To fully grasp the implications, it’s essential to understand the difference between the two types of transactions:

• Person-to-Person (P2P): This is the most common use of UPI, involving transfers between two individuals. For example, splitting a restaurant bill with friends, sending money to a family member, or paying a friend back for a movie ticket. The ₹1 lakh daily limit for these transactions is a safeguard against potential fraudulent activities and ensures that personal accounts are not used for unintended, large-scale transfers.
• Person-to-Merchant (P2M): This category involves a payment from a person to a business. It encompasses a wide range of activities, from paying for groceries at a local shop to shopping on an e-commerce website. The NPCI’s new framework directly addresses this segment, as it is where the demand for higher-value payments is most pronounced. The new aggregate daily limit of ₹10 lakh will now apply to a specified list of verified merchants.

This move positions UPI as a credible alternative to traditional high-value payment systems like NEFT and RTGS, which, despite being effective, can sometimes be more cumbersome and less immediate.

Key Sectors to Benefit from the Enhanced Limit

The NPCI’s circular specifies the exact categories that will be able to leverage the higher transaction limits. The per-transaction limit for most of these has been raised to ₹5 lakh, with the overall daily limit capped at ₹10 lakh. These sectors were strategically chosen to address the most significant pain points in high-value digital payments:

• Capital Markets: This is a major win for investors. Making investments in mutual funds, broking houses, and initial public offerings (IPOs) can now be done with a single, high-value UPI transaction, removing the previous hassle of splitting payments or using other methods.
• Insurance Payments: Paying substantial annual or quarterly insurance premiums is now more convenient and can be completed in one go, without the need for multiple transactions.
• Government e-Marketplace (GeM): For government-related payments such as taxes and earnest money deposits (EMDs), the new limits will significantly simplify financial interactions between citizens, businesses, and government entities.
• Travel and Airlines: Booking expensive flights, holiday packages, or hotel stays for an entire family can now be paid for seamlessly, enhancing the customer experience.
• Credit Card Bill Payments: With the transaction limit increased to ₹5 lakh and a daily cap of ₹6 lakh, paying off large credit card bills is now faster and more efficient.
• Collections: This includes loan repayments and EMI collections, which will now be streamlined, providing greater convenience for borrowers and better efficiency for lenders.

It is crucial for users to be aware that while the NPCI sets these ceilings, individual banks and Payment Service Providers (PSPs) retain the authority to set their own lower internal limits based on their risk management policies. Therefore, a user’s actual available limit may vary.

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