UPI raises daily P2M payment limit to Rs 10 lakh from September 15: High-value payment for insurance, investment unlocked

The increase in UPI limits for insurance and capital markets offers users greater convenience and flexibility, making high-value payments simpler and faster.

The National Payments Corporation of India (NPCI), the umbrella organisation that facilitates the Unified Payments Interface (UPI), has announced increased transaction limits for Person-to-Merchant (P2M) payments effective September 15, in a major step to enhance the utility of the service.

UPI will now facilitate larger payments in key sectors, making digital transactions more seamless for high-value purchases while maintaining security protocols. Users will be able to execute a transaction of up to Rs 10 lakh in 24 hours for specific, verified merchant categories, solely for Person-to-Merchant (P2M) payments.

The limit for Person-to-Person (P2P) limit remains unchanged at Rs 1 lakh per day.

Sector-specific enhancements

The revision addresses a longstanding pain point in categories where users often encountered restrictions, forcing them to split payments or revert to traditional methods like cheques or bank transfers.

For instance, in capital market investments and insurance payments, the per-transaction limit has been hiked from Rs 2 lakh to Rs 5 lakh, with a daily maximum of Rs 10 lakh. Similarly, on the Government e-Marketplace (GEM portal) - including earnest money deposits and tax payments - up to Rs 5 lakh per transaction is allowed, up from the previous Rs 1 lakh ceiling. The travel sector will see a substantial upgrade, with transaction limit rising from Rs 1 lakh to Rs 5 lakh, complemented by a Rs 10 lakh daily cap.

Credit card bill payments too are permitted for up to Rs 5 lakh in a single transaction, though the 24-hour limit is set at Rs 6 lakh. For loan and EMI collections, users can now pay Rs 5 lakh per transaction with a daily total of Rs 10 lakh.

Jewellery purchases has received a more modest boost, with the UPI limit increased from Rs 1 lakh to Rs 2 lakh per transaction and Rs 6 lakh per day. Additionally, banking services like term deposits through digital onboarding are now capped at Rs 5 lakh both per transaction and per day, compared to the earlier Rs 2 lakh.

UPI limit hike: A positive for high-value payments

Fintech experts have welcomed these changes, highlighting the potential of digital adoption in underpenetrated high-value segments. Akash Sinha, CEO & Co-founder of Cashfree Payments, said the move is timely. “Raising UPI limits to Rs 5 lakh per transaction and Rs 10 lakh per day is a timely move that addresses a real challenge for businesses handling high-value payments. Categories like insurance, investments, education, and travel often see drop-offs because customers are forced to split transactions or revert to traditional modes. With higher limits, businesses can now enable a single, seamless digital checkout while retaining the speed of instant settlement.”

Sinha also cited broader implications of the evolution and said, “High-value spending such as IPO subscriptions, large insurance premiums and jewellery purchases will now move effortlessly on UPI, signalling its evolution beyond low and mid-ticket use cases. This expansion also accelerates the adoption of UPI-linked credit, giving customers greater flexibility to finance big-ticket payments in one transaction.”

Benefits for consumers

Akshay Mehrotra, Co-Founder & Group CEO of Fibe - a digital lending platform – highlighted the user-centric benefits. “The increase in UPI limits for insurance and capital markets offers users greater convenience and flexibility, making high-value payments simpler and faster. This enhancement also reduces the need for multiple transactions, saving time and simplifying financial management for users.”

On sector-specific advantages, Akshay Mehrotra said for insurance, this means individuals can now pay premiums or renew policies in a single, convenient transaction, accelerating policy servicing and improving customer satisfaction.

In capital markets, investors benefit from the option to fund their accounts or invest in securities seamlessly, facilitating quicker market participation and smoother portfolio management.

Jewellery buyers gain the convenience and enhanced security of digital payments for large purchases, reducing reliance on cash or cheques and promoting safer transactions.

Meanwhile, in the travel sector, consumers can book flights, hotels, and vacation packages without the hassle of splitting payments into smaller amounts.

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Seamless implementation for users

On implementation, Fibe CEO Akshay Mehrotra assured that no user intervention is required. “Users will benefit from the higher limits automatically for eligible transactions with verified merchants in categories such as insurance, capital markets, travel, and credit card payments. There is no need for users to update their accounts or take any additional steps.”

Strengthening security for higher limits

However, with greater limits come heightened fraud risks, Mehrotra cautioned. "With higher transaction limits, vigilance around fraud prevention becomes even more critical. To address this, the rollout is backed by stronger security measures, including mandatory multi-factor authentication for high-value payments, continuous transaction monitoring powered by advanced machine learning algorithms, and stringent merchant vetting processes."

Siddharth Mehta, Co-founder of Kiwi, a digital payment firm said, “As the higher limit is only for verified merchants, it adds another layer of safety and builds trust among individuals while executing high-value transactions securely."

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A step toward financial inclusion

Overall, the updates position UPI as a versatile tool for India's digital economy, making high-value transactions more accessible and efficient. Sinha of Cashfree Payments said, "By bridging these gaps, UPI brings new levels of convenience, trust, and efficiency to segments that were previously underpenetrated, emerging as the backbone for every kind of money movement: retail, online, credit, and now high value."