Unified Payments Interface (UPI), developed by the National Payments Corporation of India (NPCI), has revolutionised digital payments in India. With the ability to link multiple bank accounts to a single mobile application, UPI allows instant and secure transactions between individuals and businesses alike. Whether for small peer-to-peer transfers or high-value business transactions, UPI’s convenience is unmatched. However, one critical factor that both customers and businesses need to understand is the UPI transaction limit.
In this blog, we’ll explore the UPI transaction limit per day, the UPI transaction limit per month, and the maximum transaction limit for various kinds of payments. We’ll also discuss how these limits vary depending on the type of transaction and the bank. In addition, we’ll cover the impact of these limits on both end customers and businesses.
What is the UPI Transaction Limit?
The UPI transaction limit is the maximum amount that can be transferred using UPI in a single transaction or within a specific period, such as per day or month. These limits are designed to ensure security and manage risks associated with large digital transactions. UPI transaction limits can differ based on the bank, type of transaction, and even the type of account being used.
UPI Transaction Limit Per Day
As of now, the general UPI transaction limit per day is capped at Rs. 1 lakh. However, this can vary depending on the type of transaction and the bank involved. Some specific transactions, such as those related to capital markets, insurance payments, and foreign inward remittances, have higher limits of up to Rs. 2 lakh per day.
In addition, some banks offer customised daily limits for UPI transactions ranging between Rs. 25,000 and Rs. 1 lakh. The daily limit also applies to the cumulative amount of money transferred through multiple transactions in one day.
Higher UPI Limits for Certain Transactions
- Payments to educational institutions and hospitals, as well as tax payments, can reach up to Rs. 5 lakh in a single day.
- Payments to IPOs and RBI retail direct schemes are eligible for higher UPI limits.
These variable UPI limits cater to different needs, ensuring that users can make larger payments where required without compromising security.
UPI Transaction Limit Per Month
Though the UPI transaction limit per day is commonly discussed, businesses and individuals also need to be mindful of the UPI transaction limit per month. While the NPCI has not enforced a universal monthly cap, some banks impose restrictions on the total amount that can be transferred via UPI over 30 days. Monthly limits can vary from bank to bank and are often based on the user’s transaction history and the account type.
For businesses handling larger volumes of transactions, it’s crucial to verify these monthly caps with their banks to avoid disruptions, especially for recurring or bulk payments.
Maximum Transaction Limit in UPI
The maximum transaction limit in UPI can vary based on the nature of the transaction:
- For most individual transactions, the cap is Rs. 1 lakh.
The maximum transaction limit rises to Rs. 2 lakh for specific categories such as capital markets and foreign remittances.
- For certain high-value payments like taxes, education fees, and medical bills, users can transfer up to Rs. 5 lakh through UPI in a single transaction.
These higher limits are particularly beneficial for businesses that process larger payments on a regular basis.
UPI for Businesses: How Transaction Limits Impact Merchants
UPI has become an indispensable tool for businesses of all sizes, from local merchants to large enterprises. However, companies must be aware of UPI transaction limits as they manage their cash flows and handle customer payments.
Importance of Transaction Limits for Businesses
1. Handling Large Transactions: For businesses processing high-value transactions, the UPI daily and monthly limits could pose some constraints. However, the introduction of higher limits for payments related to education, healthcare, and taxes helps mitigate these concerns for specific industries.
2. Interchange Fees for Merchants: Businesses should also consider interchange fees, mainly when using Prepaid Payment Instruments (PPIs) for transactions. The new guidelines mandate an interchange fee of up to 1.1% on UPI transactions over Rs. 2,000 made through digital wallets. However, individual customers are exempt from these charges.
Prepaid Payment Instruments (PPI) and UPI
PPIs, or Prepaid Payment Instruments, are digital wallets used for UPI transactions. These wallets can store money and be used for real-time payments. While convenient, UPI transactions using PPIs are subject to the same UPI transaction limits. When users pay merchants via UPI QR codes using a digital wallet, the same daily and monthly UPI limits apply. Additionally, merchants bear the interchange fees for transactions made through PPIs.
UPI Security Measures
UPI’s widespread adoption is mainly due to the platform’s robust security measures. Here’s how UPI ensures that transactions are safe and secure for users:
1. Two-Factor Authentication: UPI mandates two-factor authentication (2FA), which requires users to input both their UPI PIN and an OTP or biometric verification for every transaction.
2. End-to-end Encryption: Transactions are encrypted end-to-end, meaning that all sensitive information is protected throughout the payment process.
3. Real-Time Monitoring: UPI transactions are monitored in real-time by banks, which can detect and respond to suspicious activities almost instantly.
4. Dynamic QR Codes: For merchant payments, UPI supports dynamic QR codes that are unique to each transaction, reducing the risk of fraud.
5. UPI PIN Security: Every UPI transaction requires a UPI PIN, ensuring that only authorised users can complete payments.
Conclusion
UPI has transformed the digital payment landscape in India, making it simpler and faster for individuals and businesses alike. Understanding the UPI transaction limit, whether it’s the UPI transaction limit per day or the maximum transaction limit in UPI, is essential for ensuring seamless transactions. With robust security measures in place and customisable limits for different needs, UPI remains one of the most secure and reliable payment platforms in India.
FAQs
1. What is the UPI transaction limit per day?
The standard UPI transaction limit per day is Rs. 1 lakh. However, for certain transactions, such as payments to hospitals, educational institutions, and tax offices, the limit can go up to Rs. 5 lakh.
2. What is the UPI transaction limit per month?
While NPCI does not enforce a universal monthly cap, many banks impose their own UPI transaction limit per month based on account type and transaction history.
3. Are UPI payments free for users?
Yes, UPI payments are generally accessible for users making personal transactions. However, businesses may incur interchange fees on payments over Rs. 2,000 if a PPI (digital wallet) is used.
4. Is UPI secure for large transactions?
Yes, UPI incorporates robust security features, including two-factor authentication and end-to-end encryption, ensuring that even high-value transactions are protected.
5. Can businesses request higher UPI limits?
Yes, businesses can work with their banks to request higher UPI transaction limits, especially for industries like education, healthcare, or large-scale retail.
