The NPCI has introduced new UPI transaction limits and surcharges, affecting users and merchants across India.
UPI Transaction Limits – The Unified Payments Interface (UPI) has revolutionized digital transactions in India, offering instant, secure, and free payments. However, recent changes introduced by the National Payments Corporation of India (NPCI) have raised concerns among users and businesses. With new transaction limits and surcharges, the way people use UPI is evolving.
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Understanding UPI Transaction Limits
UPI transactions are subject to daily, weekly, and monthly caps, which vary across banks and payment providers. The standard daily limit for most banks is ₹1 lakh, but some institutions impose lower or higher caps based on user profiles and risk assessments.
UPI Transaction Limits Across Banks
- State Bank of India (SBI), HDFC Bank, ICICI Bank, Axis Bank: ₹1,00,000 per day
- Punjab National Bank (PNB): ₹50,000 per day
- Union Bank of India: ₹2,00,000 per day
- IDFC First Bank: ₹1,00,000 per week, ₹30 lakh per month
These limits can restrict high-value transactions, particularly for businesses and individuals making large payments.
Impact of Transaction Limits on Users
- Business Transactions: Merchants handling large payments may struggle with daily caps, forcing them to split transactions or seek alternative payment methods.
- Real Estate & High-Value Purchases: Users making property payments or large investments may find UPI limits restrictive.
- Emergency Transfers: In urgent situations, users may be unable to transfer large sums instantly, leading to delays.
- E-commerce & Bill Payments: Online shoppers and utility bill payers may need to adjust payment methods based on transaction limits.
UPI Surcharge: What’s Changing?
From April 1, 2025, UPI transactions exceeding ₹2,000 made through digital wallets like Paytm, PhonePe, and Amazon Pay will incur an interchange fee of up to 1.1%. This fee applies only to merchants, meaning customers making direct bank-to-bank UPI transfers remain unaffected.
Breakdown of UPI Surcharge Rates
- Fuel Payments: 0.5% surcharge
- Telecom, Utilities, Education: 0.7% surcharge
- Supermarket Transactions: 0.9% surcharge
- Insurance, Mutual Funds, Government Services: 1% surcharge
Repercussions for Businesses & Consumers
For Users:
- Standard UPI payments remain free, ensuring no additional charges for direct bank transfers.
- Wallet-based transactions above ₹2,000 may cost more, depending on merchant policies.
- Consumers may see price adjustments, as merchants factor in the surcharge.
For Merchants:
- Businesses accepting wallet payments must pay the interchange fee, potentially affecting profit margins.
- Retailers may shift to direct UPI payments, reducing reliance on PPIs.
- Small businesses could face challenges, as transaction costs increase.
Industry Reactions & Future Outlook
The introduction of UPI transaction limits and surcharges has received mixed reactions. While banks and payment providers welcome the move, citing improved revenue streams, merchants and digital wallet users express concerns over rising costs and restricted transaction flexibility.
Experts predict that:
- More businesses will encourage direct UPI payments, bypassing wallet fees.
- Digital wallets may introduce cashback offers to offset the surcharge.
- The NPCI may review the fee structure, depending on adoption rates and feedback.
Conclusion
As India continues its digital payment revolution, the UPI surcharge and transaction limits mark a significant shift in financial policies. While standard UPI transfers remain free, businesses and users must adapt to new cost structures for wallet-based payments and high-value transactions.
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