NPCI Urges Compliance with Higher UPI Limit by Jan 10
The National Payments Corporation of India (NPCI) has mandated its members to adhere to the Reserve Bank of India’s (RBI) decision of raising the UPI transaction limit to Rs 5 lakh for hospitals and educational services by January 10. In order to ensure compliance, NPCI has directed banks, payment service providers (PSPs), and UPI applications to elevate transaction limits specifically for designated merchant categories.
“It’s a positive step forward. With an increase in average transaction size in these sectors, raising the limits is a beneficial move,” expressed Vishwas Patel, Joint Managing Director of Infibeam Avenues. He foresees smooth implementation of these changes by January 10 with no substantial challenges.
PhonePe has affirmed its progress in implementing necessary changes for users within the specified timelines. The NPCI clarified that the escalated UPI limit, from Rs 1 lakh to Rs 5 lakh, is exclusively applicable to “verified merchants.” In a circular, the NPCI urged members, including PSPs, banks, UPI apps, and merchants, to acknowledge the enhancement and make essential adjustments by January 10, 2024. Merchants must activate UPI with the elevated limits, and acquiring entities are tasked with vetting and adding merchants to the verified list.
While acknowledging their role as an acquirer, PhonePe highlighted their internal due diligence process to ensure compliance with regulatory requirements. Patel underscored the significance of their due diligence in ensuring the accurate application of the increased transaction limit to relevant categories. He emphasized the need to prevent system misuse, citing an example of hotels falsely identifying themselves as hospitals.
In the previous month, the RBI increased the UPI payment limit for hospitals and educational services. The UPI transaction limit, previously capped at Rs 1 lakh, saw exceptions in categories like capital markets and collections (e.g., credit card payments, loan repayments, insurance), where the limit was Rs 2 lakh. Meanwhile, the NPCI has commenced the deployment of “UPI Tap and Pay” across digital payment providers. Members are required to integrate the UPI Tap and Pay functionality by January 31, 2024, following the release of feature rollout details.