The National Payments Corporation of India or NPCI, the umbrella organization for retail payments systems, has doubled the per transaction payment limit for Unified Payments Interface or UPI to Rs 2 lakh for some payments.
The committee has approved to increase the current limit of Rs 1 lakh per transaction to Rs 2 lakh. This is to fulfill specific needs, including payments for credit cards, loans, insurance, and mutual fund investments.
The move will be effective from April 2020 and would boost the transactions for categories such as AMC, B2B collections, mutual funds, insurance, pre-approved disbursements, and credit card payments, et al.
NPCI might even add incremental categories to this enhanced limit as and when required, stated the circular quoted by TOI.
The decision would help in promoting and increasing the use and adaption of UPI among millions of customers who need to make transactions in large volumes.
Last month, UPI had registered 1.32 billion transactions worth Rs 2.21 trillion (Rs 2,21,995 crore) — highest ever in terms of volume and value.
NPCI’s steering committee had been planning for a long time on doubling the current transaction limit to Rs 2 lakh for all categories where double KYC is in place.
Meanwhile, NPCI has scrapped PSP and interchange fee for peer-to-merchant (P2M) transactions for an interim period April 30, and the move will be implemented with retrospective effect of January 1, 2020.
As of now, beneficiary banks make Rs 0.25 on transaction up to Rs 1,000, Re 1 on a transaction worth Rs 25,000 and Rs 5 on up to Rs 75,000.
Waiving off these fees will affect the revenue model for merchant-based UPI payments service providers — Google Pay, PhonePe, Paytm, BharatPe and Amazon Pay.
While Google Pay, PhonePe and Paytm control over 90% of the UPI market share, BHIM, Amazon Pay, FreeCharge, MobiKwik, and WhatsApp Pay (for select users) collectively have a little over 5% share.