The National Payments Cooperation of India, which controls the United Payments Interface has doubled the per transaction limit to Rs.2 Lakh for certain kind of transactions. This announced increment in limits will be effective for specific needs such as payments for credit cards, loans, insurance and mutual fund investments.
According to a circular from the payment body to its partner banks dated March 3rd, these changes will be effective from the coming month onwards.
These changes have been due for quite some time now. In July 2018, when a major upgrade was set to be introduced, the ‘standing instruction’ feature lacked approval from the Reserve Bank of India. Much like the auto-debit facilities for loan payments, this feature enabled customers to directly instruct banks. Banks may be instructed by consumers to debit their accounts regularly for repeat transactions. This feature gets rid of the hassle of manually authorising these payments repeatedly, though also increasing some degree of risk, usually associated with such transactions. With the approval of this feature, the limit has been doubled for credit card, loans and insurance related payments.
The move is definitely an advancement in a day and age when most payments are digital. According to the circular, the payment body may further introduce increment categories to the enhanced payment limit whenever the requirement arises.
UPI has been a torch-bearer of sorts when it comes to the phenomenal increase in digital payments that we have witnessed in India for past half a decade or so. With the growth of digitization, UPI is becoming a widely used mode of payment clocking about a billion transactions per month. As of this month, 1.32 Billion transactions were made via UPI, a record globally.