Why Does UPI Have Transaction Limit? And Some More UPI Facts Explained

Why Does UPI Have Transaction Limit? And Some More UPI Facts Explained

Previously we used to rely on cash for most of our daily transactions and for online shopping we utilized our debit and credit card but after the arrival of UPI or Unified Payment Interface, we have become accustomed to the cashless, efficient, and quick payment service. Furthermore, UPI is accessible to everyone and anyone with a bank account can make use of this digital payment system.

In this article, we will get to know more about the UPI transaction limit and some important facts we should be aware of while using this particular payment system.

Everyone with a bank account can easily use this UPI digital payment system.

What is UPI or Unified Payment Interface?

UPI or Unified Payment Interface is a digital payment system brought out by the NPCI or National Payments Corporation of India. It can help in transferring money between two bank accounts instantaneously. Furthermore, UPI has been able to bring multiple banks under one single platform and people can use their bank accounts to facilitate their payments simply by using their mobile devices.

What is the normal transaction limit of UPI?

The transaction limit of UPI has been set up by the National Payments Corporation of India, a governing body under the Reserve Bank of India. Currently, the set transaction limit of UPI is Rs. 1 lakh, which means if anybody wants to transfer a huge amount of money through UPI, they can send a maximum of 1 lakh rupees in a single transaction. For verified merchants the transaction limit of UPI was raised to Rs. 2 lakhs according to the circular released by the NPCI in March 2021 but it is limited to specified use cases.

Moreover, the maximum number of UPI transactions you can complete in one day is 20 and this number can also vary according to the bank. You also need to remember that the transaction limit of UPI can also change with time. For example, a lot of reputed banks have removed the number of transactions an individual can conduct in a single day.

Specified transaction limit of UPI

According to the NPCI limit, the banks have the ability to regulate their own UPI transaction limit. Banks also have the authority to lower the overall UPI transaction cap and some banks have applied the same in order to provide further protection. Therefore, the overall limit of UPI transactions can solely depend on the bank itself. The limit can be anywhere between Rs. 10000 to Rs. 1 lakh decided by the banks.

For example, the State Bank of India has set the upper cap for UPI transactions at Rs. 1 lakh. If you transfer Rs. 1 lakh to another bank account then your transaction limit of UPI will be saturated for the day. You will not be able to conduct any more transactions because you have reached the maximum amount.

Important facts about UPI transfer you need to know

UPI is a relatively new digital payment system and a lot of people don’t have much knowledge about this payment system. Let us look at some of the fundamental facts about the Unified Payment Interface and clarify our thoughts:

  • Using the same UPI ID, you will be able to link multiple bank accounts.
  • You can transfer money through a UPI app to another account but before that, you will need to enter some specific and important details. After that, the payment will be completed instantly.
  • UPI transaction is completely free of cost and you can make use of this technology 24*7.
  • Once the UPI platform starts processing a payment you will not be able to reverse the payment process or cancel it.
  • If a UPI transaction fails your money will be refunded to your source account.
  • The National Payment Corporation of India or NPCI is the identifier of the correct account in a UPI system. Although the digital payment service is completely free, there is a discussion of charging Rs. 5 per UPI transaction directly from the user’s bank account.
  • With the help of the UPI digital payment system, the money is directly transferred to the bank account of the UPI ID holder. Since the banks are already connected with each other under the Unified Payment Interface scheme they don’t charge for the transactions.
  • You are allowed to download multiple UPI apps on the same device at the same time, you can also utilize a single bank account in multiple UPI apps.
  • Some of the famous UPI apps available in India are Google Pay, PhonePay, BHIM app, Amazon Pay, etc.

The Unified Payment Interface has been able to revolutionize the entire payment system of India and now people can conduct transactions in a matter of seconds and that too for absolutely zero cost. From roadside vendors to shopping malls, everyone can utilize this system for daily transactions and benefit from the UPI digital payment system.