New Delhi:
In a significant development, the Reserve Bank of India (RBI) has taken a bold step to enhance the transaction limit for Unified Payment Interface (UPI) payments from Rs 1 lakh to Rs 5 lakh.
This progressive move, initially announced in December,
specifically caters to transactions involving hospitals and educational institutions.
UPI Payment Landscape Overhaul
During the monetary policy meeting in December 2023, the RBI unveiled plans to revamp the UPI payment landscape. The pivotal decision includes an increased transaction limit and an expansion of the UPI auto-payment limit.
Notably, Additional Factor Authentication (AFA) will be mandated for UPI auto-payments exceeding Rs 15,000.
NPCI Urges Prompt Implementation
The National Payment Corporation of India (NPCI) has issued a circular on December 19, 2023,
urging banks and payment service providers (PSPs) to swiftly implement the heightened UPI transaction limits.
Citing UPI’s growing popularity as a preferred payment method,
the circular underscores the need for aligning per transaction limits with the developmental and regulatory policies outlined by the RBI on December 8, 2023.
UPI Payment Surge for Hospitals and Educational Services
As a consequence of these regulatory changes, the per transaction value limit for UPI payments has now been elevated to Rs 5 lakh for merchants falling under categories associated with hospitals and educational services.
Importantly, this increased limit is applicable exclusively to verified merchants.
All stakeholders are expected to seamlessly integrate and implement these modifications by January 10, 2024.
This move by the RBI is poised to streamline and boost digital transactions, especially in crucial sectors such as healthcare and education, setting the stage for a more dynamic and secure UPI ecosystem.
