Starting in mid-2025, the National Payments Corporation of India is to institute some new rules for UPI transactions. These were to institute an added security layer, hassle-free large-value transactions, and better adherence from banks and wallet providers. So here is what UPI users such as Google Pay, PhonePe, Paytm, BHIM, etc., must realize.
1. Transaction Charges For High-Value Payments
Starting July 2025, UPI transactions passing ₹2,000 could be levied with small charges by banks and wallet operators alike. While P2P is generally free, commercial transactions or merchant payments that strictly cross this amount may attract a negligible fee of 0.5% to 1%, especially for credit card-linked UPI payments-this is for maintenance infrastructure costs and discouraging big value transfers.
2. GST To Be Imposed On Select Payments
The government may consider that GST be levied on some Payments done through the UPI, notably the merchant payments. So, a small GST may be imposed on UPI payments for business in excess of ₹2,000. That would help the government in increasing indirect taxes, by way of promoting more digital transactions in a formal manner.
3. New UPI Transaction Limits
To curb fraud, the transaction limit is going to be imposed on daily levels based on the different use cases. A common person can thus transact up to ₹1 lakh within a day while some unusual use cases such as for education and healthcare may be allowed higher limits of up to ₹2 lakh within a day. Banks can set their limits subject to risk profiles.
4. UPI For Credit Cards Extended
An equally important change includes a larger rollout of credit card-linked UPI transactions. At present, these functions are available with RuPay credit cards and the NPCI proposes to implement them onto other networks like Visa and Mastercard. Thus, it would allow one to make payments via UPI from their credit card accounts without any intermediaries of debit cards or wallets.
5. New Authentication Procedures
To prevent unauthorized operations on payments above a certain threshold, all UPI apps will demand two-factor biometric authentication for high-value payments. This may involve Face ID, fingerprint-based authentication, or Aadhaar-based OTP for an added layer of safety.
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