RBI Revises UPI Limits: What the New Rules Mean for Your Transactions

 In a move to boost digital payments and align with emerging financial needs, the Reserve Bank of India (RBI) has announced an update to the Unified Payments Interface (UPI) transaction limits. The revision allows for higher caps on Person-to-Merchant (P2M) transactions, while Person-to-Person (P2P) transfers will continue to be capped at ₹1 lakh.

The RBI stated that the National Payments Corporation of India (NPCI), in collaboration with banks and other UPI stakeholders, will now be empowered to revise limits based on user requirements. This flexibility is aimed at accommodating the increasing use of UPI in diverse scenarios, such as high-value retail purchases and business transactions.

Unified Payments Interface, UPI

What Changes for You?

1. Larger Payments Made Easier
   With more people and businesses using UPI for everything from small daily payments to significant transactions, the revised P2M limits make it easier to pay for higher-value goods or services without splitting the amount into multiple payments. Whether you're running a business or purchasing expensive electronics, this upgrade allows you to complete payments smoothly and securely in a single transaction.

2. Security Measures to Ensure Safe Transactions
   As higher limits increase the risk of misuse, the RBI and NPCI will implement stronger safeguards. This includes enhanced verification methods like two-factor authentication or biometric checks for larger payments. These precautions aim to maintain the safety and trust that users associate with UPI.

3. Bank-Specific Controls Still Apply
   While the overall transaction cap is set by NPCI, your bank can still define its own internal limits. That means some users may face different limits depending on their bank's policies—even if the platform allows for higher thresholds.

4. No Change to P2P Limits
   If you use UPI mainly to send money to friends or family, nothing changes. The limit for P2P transactions remains ₹1 lakh per transaction. The RBI has confirmed that this cap will stay in place for now.

UPI Use on the Rise, Especially for Small Payments

Interestingly, while limits for larger payments are being revised, the average size of UPI transactions is shrinking. In February 2025, the average UPI payment dropped to ₹1,364 from ₹1,510 a year earlier, even though total transactions surged by 33% to 16 billion, moving ₹22 trillion that month. This highlights UPI’s growing dominance for everyday purchases and micro-payments.

Experts believe that the updated framework will not only improve convenience but also allow UPI to serve broader purposes, including cross-border payments and larger merchant transactions.

As the UPI ecosystem continues to expand and evolve, this move marks another step in India's digital finance transformation.