Explained | Daily limit on UPI transactions Premium

As transactions facilitated by the Unified Payments Interface (UPI) breach record highs, banks have opted for daily limits. These are over and above the already imposed ceilings mandated by the facilitator, the National Payments Corporation of India (NPCI), in 2021. The idea is to sustain the smoother functioning of the payments interface as it continues to acquire popularity.

The story so far:

As transactions facilitated by the Unified Payments Interface (UPI) breach record highs, banks have opted for daily limits. These are over and above the already imposed ceilings mandated by the facilitator, the National Payments Corporation of India (NPCI), in 2021. The idea is to sustain the smoother functioning of the payments interface as it continues to acquire popularity.

At present, users can make up to 20 transactions or ₹1 lakh in a single day — either all at once or through the day. For certain specific categories of transactions such as the capital markets, collections (such as bills, among others), insurance and forward inward remittances, the limit is ₹2 lakh. In December 2021, the limit for the UPI-based ASBA (Application Supported by Blocked Amount) IPO and retail direct schemes was increased to ₹5 lakh for each transaction.

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The conversation now revolves around banks and apps coming up with their own guidelines for transactions. For example, state-run lenders Punjab National Bank (PNB) and Bank of Baroda has set its transaction limit at a much lower ₹25,000. PNB’s daily limit is ₹50,000. As for apps, among others, Google Pay users breach the daily limit if they try to send money more than ten times in a single day across all UPI apps.

As the payments interface looks to expand its footprint (recall the boarding of non-resident accounts having international numbers into the ecosystem) and its growing utility in daily lives, limits would help maintain an essential security infrastructure and its seamless functioning. This is also important as the interface looks to expand its use-case, as also called for in the proposed pilot project for coin-vending machines with UPI as the facilitator.

Digital payments app PhonePe’s spokesperson told The Hindu, “The limits are set balancing out customer convenience and potential fraud/risk concerns. The NPCI has also increased the value limit in specific categories where the average transaction value is higher such as Capital Markets or Credit Card Bill payments.”