UPI Big Update: Higher Payment Limits for Insurance, Loans & Travel

From 15 September 2025, the National Payments Corporation of India (NPCI) is implementing enhanced UPI transaction limits. These apply especially to Person-to-Merchant (P2M) transactions in specified categories: insurance, loan/EMI/collections, travel, government e-marketplace, capital markets (investments), credit card bill payments, jewellery, digital account opening etc. 

Meanwhile, Person-to-Person (P2P) limits remain unchanged.

Previous Limits vs New Limits for UPI Transactions

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Below is a table that summarises the difference between the earlier limits (prior to 15 September 2025) and the new revised limits as per the NPCI circulars. These focus on selected merchant categories where limits were increased. 

Before you look at the table, note that “per transaction” refers to one single payment, while “24-hour aggregate/daily” refers to all payments in that category in one day. Also, only verified merchants in those categories are eligible.
 

Conclusion from the table:

These changes significantly raise the ceilings for high-value transactions in several merchant-based categories. What was earlier ₹1-2 Lakhs per transaction now is often ₹5 Lakhs, with daily aggregates of ₹5-10 Lakhs in many cases. 

This means less need for splitting payments, fewer hassles, and more convenience for users and merchants alike.

What Is the UPI Limit for Person-to-Person Payments?

The Person-to-Person (P2P) UPI limit remains unchanged at ₹1,00,000 per day.

Why This limit is kept the same:
 

• P2P transactions are generally more subject to fraud, impersonation, incorrect transfers, etc. Keeping a lower cap helps protect users, especially those who might accidentally send money to the wrong VPA.
   
• Many small everyday uses (splitting bills, sending gifts, lending small amounts) fall under P2P; so the existing ₹1 lakh daily limit already suffices for most of those use cases.
   
• NPCI likely wants to balance between enabling high-value merchant-oriented digital payments and maintaining safety for core person-to-person transfers. Raising P2P too much could increase risk exposure.

So, while many merchant categories got higher limits, P2P is deliberately kept at a conservative level for safety and regulatory oversight.

NPCI’s Decision to Increase Limits for Insurance, Loans, and Travel Payments: Good Move or Not?

Raising UPI limits for categories like insurance, loan/EMI, travel, etc. has been widely welcomed. It helps align India’s digital payments system with growing demand, as many people find earlier caps restrictive.

Some Indian leaders and well-known figures have publicly or in commentary praised this. For example:

• Akash Sinha, CEO & Co-founder of Cashfree Payments, was quotedas  saying that increasing UPI limits to ₹5 lakh (per transaction) and ₹10 lakh (daily) is “a timely move that addresses a real challenge for businesses handling high-value payments.”
   
• Fintech experts in general note that many customers were forced earlier to revert to cheques or bank transfers because UPI couldn't accommodate large payments for travel bookings, insurance premiums or investment transactions. The increased limits reduce friction.
   

Of course, there are arguments against increasing limits too, but the general consensus seems positive.

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Pros:

• Convenience: Users don’t need to split large payments or use less convenient payment modes.
   
• Digital penetration: More high-value transactions can now happen via UPI, pushing forward India’s digitisation.
   
• Faster settlements: UPI is near-instant; alternative methods (NEFT, RTGS, cheques) are slower.

Challenges / Risks:

• Fraud / security concerns: Higher value transactions might attract phishing, spoofing etc. The requirement that merchants be verified helps reduce this risk.
   
• Risk exposure: Banks and PSPs will need to ensure their risk management, KYC, AML norms are robust for these higher limits.
   
• Uniform implementation: Some smaller banks or payment apps might lag in implementing the changes, so user experience could be uneven.
   

Overall, raising limits is seen by many in the industry as a good decision. Indian digital payments infrastructure has matured enough to handle greater volumes; now the regulatory framework is moving to support that.

Conclusion

The NPCI’s changes, effective 15 September 2025, mark a notable shift in UPI’s capability: by raising limits in merchant categories such as insurance, travel, investments, and credit card/loan payments, UPI becomes more useful for high-value payments. At the same time, keeping the P2P limit unchanged ensures a guardrail against misuse and fraud in personal transfers.

For users, this means greater convenience, less need for multiple transactions, and faster settlement. For merchants and service providers in select verified categories, the changes unlock opportunities for bigger UPI-enabled businesses.

In sum, the update reflects how India is continuing to scale its digital payments ecosystem, matching regulatory oversight with user needs. If you regularly make large UPI transactions, check whether the merchant is verified, be aware of daily aggregate limits, and ensure your UPI app or bank has updated these features.
 

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