Synopsis- UPI transaction limits are set to rise from September 15, 2025, with verified merchants in these now allowed transactions up to ₹5 lakh. This expansion by NPCI strengthens India’s digital payment ecosystem, enabling seamless high-value transfers while ensuring compliance and merchant verification for secure adoption.

National Payments Corporation of India (NPCI) has declared that the transaction limits of Unified Payments Interface (UPI) will be increased starting September 15, 2025. This increase in transaction limit will raise the limit to ₹5 lakh for selected verified merchant categories such as sectors like capital markets, insurance, and travel, which is sure to change the landscape of digital payments in India.

Enhanced Transaction Limits for Special Categories

The new transaction framework introduces substantial increases across multiple merchant categories. Capital markets, insurance, government e-marketplace (GeM), travel, credit card bill payments, collections, business/merchant transactions, foreign exchange retail via BBPS platform, and digital account opening for term deposits now all have per transaction limits of ₹5 lakh. In addition, jewellery purchases and digital account opening for initial funding received increased limits of ₹2 lakh per transaction.

Capital markets and insurance transactions previously capped at ₹2 lakh are increased to  ₹5 lakh per transaction. The same increase occurred with government e-marketplace and travel payments which operated under a prior limit of ₹1 lakh up until the new transaction framework. Cumulative 24 hour limits have also been increased with most merchant categories allowing for ₨10 lakh worth of daily cumulative transactions, excluding credit card transactions which remain at a daily cap of ₹6 lakh.

Categories Enhanced limit CumulativeCapital market                                           5 lakh 10 lakhInsurance 5 lakh10 lakhTravel 5 lakh10 lakhCredit card bill5 lakh 6 lakhCollections 5 lakh10 lakhBusiness/merchant5 lakh—Jewellery 2 lakh 6 lakhFX retail use case 5 lakh 5 lakhDigital Account Opening 5 lakh5 lakhDigital account opening – initial funding2 lakh2 lakh

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Scope and Implementation Guidelines

This improvement is applicable only to Person-to-Merchant (P2M) transactions done with verified merchants in compliance with NPCI standards. Person-to-Person (P2P) transactions will continue to be subject to the daily limit of ₹1 lakh. The NPCI circular dated August 28, 2025, makes it clear that acquiring member banks are responsible for ensuring that these enhanced limits are applied only to merchants in compliance.

Evolution of UPI Transaction Framework

This move aligns with NPCI’s progressive stance on expanding UPI capabilities. In December 2023, the transaction limit for hospitals and education services was raised to ₹5 lakh and in August 2024, the limit for tax payment category was increased. This extension significantly expands the area of high value UPI transactions. The evolved framework preserves existing security protocols while enhancing the system and fulfilling increased demand for digital payments. UPI had already surpassed 18.4 billion transactions worth ₹24.04 lakh crore in June 2025, and the limit increase marks maturity and reliability of the system.

Merchant Verification and Compliance Requirements

The increased limits are solely restricted to verified merchants that satisfy the standards of compliance as described in the operational circulars of NPCI. This check will ensure transaction security as well as avoid misuse of increased limits. To benefit from these additional limits the merchants should be categorized by specific Merchant Category Codes (MCCs). Banks also have a significant role to play in the implementation process as they have to check the compliance of merchants before providing them higher limits. This responsibility ensures that only legitimate and verified businesses can use the enhanced transaction capabilities.

Final Thoughts

The National Payments Corporation of India (NPCI) permitting UPI transaction limits to be raised to ₹5 lakh for verified merchants is a milestone in India’s digital payments journey. By enabling high-value seamless transfers in areas like investments, insurance, and government payments, UPI is now not just a mechanism for small-ticket retail items but clearly a broader platform facilitating the country’s financial infrastructure. Starting September 15, 2025, individuals and businesses will be able to settle high-value transactions with added ease, efficiency, and security.

Written by Prajwal Hegde