The National Payments Corporation of India (NPCI) has asked its members to comply with the Reserve Bank of India’s (RBI’s) decision to increase the UPI transaction limit to Rs 5 lakh for hospitals and educational services by January 10. The NPCI has instructed banks, payment service providers (PSPs), and UPI applications to increase transaction limits for the specified merchant categories.
In the December bi-monthly Monetary Policy Committee (MPC) meeting, RBI Governor Shaktikanta Das announced that the UPI payment limits for hospitals and educational institutions will be raised to Rs 5 lakh from Rs 1 lakh per transaction. “This will help the consumers to make UPI payments of higher amounts for education and healthcare purposes,” Das said.
“Members (PSPs & Banks), UPI apps, merchants, and other payment providers are requested to take note of the enhancement and undertake requisite changes. Members are requested to ensure compliance with the same by January 10, 2024,” NPCI said in a circular.
Merchants are required to enable UPI as a payment mode with the increased limits.
Acquiring entities will be responsible for adding merchants to the verified list after conducting due diligence, NPCI said.
Right now, the UPI transaction limit set by NPCI is Rs 1 lakh per day.
UPI is a real-time payment system that enables smooth and instant transactions between banks using smartphones. NPCI floated UPI in a bid to revolutionise digital transactions by offering a consolidated platform for different banking services.
UPI functions by connecting bank accounts to mobile numbers, allowing users to make payments, transfer funds, and conduct various financial activities through UPI-enabled applications. Users can create a distinctive UPI ID, which serves as a transaction identifier, eliminating the requirement to share confidential bank information.
Under the higher limit system, merchants are required to enable UPI as a payment mode with the increased limits. Acquiring entities will be responsible for adding merchants to the verified list after conducting due diligence.
UPI platform has crossed the 100 billion mark in 2023, totalling around 118 billion transactions in the entire calendar year. This is a 60 per cent growth compared to the 74 billion transactions recorded in 2022, NPCI data stated.
The total value of UPI transactions in 2023 stood at approximately Rs 182 lakh crore, a 44 per cent increase compared to Rs 126 lakh crore in 2022. If we look at the monthly transaction amount, the same touched Rs 18.23 lakh crore in December, showcasing a 54 per cent increase compared to the corresponding data for 2022.
In December, the total number of transactions was recorded at 12.02 billion, marking a 42 per cent rise from the previous year.
Last month, NPCI announced the launch of an Application Supported by Blocked Amount or ASBA-like facility in the secondary market after getting the go-ahead from SEBI.
The UPI for the secondary market will start its beta phase next week for the equity cash segment. It will be supported by key stakeholders, including clearing corporations, stock exchanges, depositories, stockbrokers, banks, and UPI app providers.
NPCI stated that in the initial phase, this functionality will be available for a limited set of pilot customers.
Also read: HDFC Bank goes live with ‘UPI for secondary market’ facility in stock trading; see details
Also read: Year ender 2023: UPI transactions rose 147% in 5 years. A look at new features announced this year