UPI Transaction Limits 2026 and the New Rs 2,000 Rule

UPI is not getting a new transaction limit this week, but it did just get a new legal floor. A Finance Ministry gazette notification dated September 14 makes it a statutory requirement, not just a policy choice, that no bank or payment provider can charge you for a UPI or RuPay debit card payment up to Rs 2,000. A day later, NPCI’s UPI Services Steering Committee was reportedly meeting to work out what happens above that line, where merchant charges have been left open for the first time since UPI went zero-MDR in January 2020.

What the September 14 Notification Actually Says

The notification was issued by the Department of Financial Services under Section 10A of the Payment and Settlement Systems Act, 2007. Its operative line is direct: no bank or system provider shall impose, directly or indirectly, any charge on a person making or receiving a payment through UPI or a RuPay debit card, for amounts up to Rs 2,000.

That sounds like the zero-MDR rule UPI has run on for over five years, but the legal basis is new. Recent amendments to Section 10A removed the blanket zero-charge protection that used to cover UPI outright, and replaced it with government authority to decide which payment modes stay free and up to what value. This notification is the government using that authority for the first time, and it draws the line at Rs 2,000, not at “all UPI transactions.”

What it does not do is say anything about transactions above Rs 2,000. That silence is deliberate. Finance Minister Nirmala Sitharaman said in August that a Merchant Discount Rate, if it comes, would apply to merchants rather than the person paying, and that the UPI Services Steering Committee still had to finalise the framework.

What NPCI Is Deciding Today

That committee meeting is where things stand as of today, September 15. Sources cited by Business Today say NPCI is discussing MDR specifically for UPI transactions above Rs 2,000, with banks and payment system providers at the table. No rate has been made public.

The context is a five-year-old zero-MDR regime that has never charged anyone, on either side, for a UPI payment, while the network has grown to more than 55 crore users and over 700 participating banks and apps. The government’s own framing points toward a narrow outcome, a nominal rate on a limited set of high-value merchant transactions, with person-to-person transfers staying free regardless of amount. Whether that survives the committee process is still open.

The Limits That Were Already There

Charges are the new story. The underlying transaction limits are not, and most of the coverage this week has skipped past them. Here is what actually caps a UPI payment right now, separate from any charge question.

Payment type	Limit
Person-to-person (P2P) transfers	Rs 1 lakh per day, aggregated across all UPI apps on the account
Standard merchant (P2M) payments	Rs 1 lakh per transaction
Verified merchants in travel, healthcare, education, insurance and government	Up to Rs 5 lakh per transaction, Rs 10 lakh aggregate per day
Capital markets, IPOs, insurance premiums, RBI Retail Direct	Up to Rs 5 lakh per transaction
New UPI users, first 24 hours after registration	Rs 5,000 total
Transaction count	Most banks cap it around 20 UPI transactions a day

The P2M jump to a Rs 10 lakh daily aggregate for verified merchants isn’t new either, NPCI raised it from the old Rs 1 lakh ceiling back in September 2025, specifically so a hospital bill, a semester’s tuition or a travel booking didn’t have to be split across several days of payments. What’s new this month is only the charge question layered on top of these existing caps.

Banks can and do set their own limits inside NPCI’s ceiling, some cap regular consumer accounts anywhere from Rs 25,000 to the full Rs 1 lakh a day. If a payment is getting rejected below the headline Rs 1 lakh figure, that’s usually your bank’s own setting, not NPCI’s.

Why This Actually Matters for You

For the overwhelming majority of UPI use, groceries, autos, splitting a dinner bill, this changes nothing you’ll notice, because the median UPI transaction is well under Rs 2,000 and is now explicitly protected by law rather than by a policy NPCI could revisit. Person-to-person transfers, at any amount, are not part of the MDR conversation at all.

Where it could eventually matter is high-value merchant payments, a large electronics purchase, a jewellery bill, a big-ticket service payment, if the committee lands on an MDR for transactions above Rs 2,000. Even then, the government’s own language points to a fee that merchants pay, not one added to your bill, though how that plays out at checkout is exactly what’s still being negotiated. Splitting a large payment into smaller ones to dodge a threshold won’t help either way, since the daily limits are aggregate caps, not per-transaction resets.

If you’re one of the people using UPI’s higher ceiling this week, applying for an IPO through the ASBA/UPI route, for instance, the relevant number is the Rs 5 lakh capital markets limit, not the Rs 1 lakh everyday cap. NSE’s latest IPO price band, out this week, is a live example of exactly that use case.

Frequently Asked Questions

Is UPI free for all transactions now?

Payments up to Rs 2,000 are now free by law, not just by policy, under the September 14 notification. Transactions above Rs 2,000 are not automatically free or automatically charged, that’s what NPCI’s steering committee is still working out.

What is the daily UPI transaction limit?

Rs 1 lakh a day for regular person-to-person transfers, aggregated across every UPI app linked to your account. Verified merchants in categories like travel, healthcare and education can accept up to Rs 10 lakh a day in aggregate, with a Rs 5 lakh per-transaction cap.

Will merchants start charging for UPI payments above Rs 2,000?

Not yet, and not automatically. The government has said any future MDR would apply to merchants on a limited set of high-value transactions, at a nominal rate. No rate has been finalised as of this article.

Can I get around the Rs 1 lakh limit by splitting a payment?

No. The Rs 1 lakh figure is a daily aggregate across all UPI transactions on your account, not a per-transaction limit you can work around by sending several smaller payments.

Key Takeaways

• UPI and RuPay debit payments up to Rs 2,000 are now legally protected from charges, under a September 14 gazette notification issued under Section 10A of the PSS Act, 2007.
• What happens above Rs 2,000 is still undecided. NPCI’s UPI Services Steering Committee was discussing an MDR framework for higher-value merchant transactions as of September 15.
• The underlying transaction limits are unchanged: Rs 1 lakh a day for P2P, Rs 1 lakh per transaction for standard merchant payments, and up to Rs 10 lakh a day for verified merchants in select categories.
• Daily limits are aggregate caps, not per-transaction ones, splitting a payment into smaller pieces doesn’t get around them.

Money questions this week haven’t stayed inside UPI. The rupee broke past 95 to the dollar just two days before this notification landed, if you’re sending money abroad rather than paying a merchant at home, our live INR to USD tracker is the more relevant number to watch. And if UPI’s higher ceilings have you thinking about where a lump sum should actually go, it’s worth comparing against how gold prices are determined in India, or checking live market levels before you move it.

Sources

• Business Today: UPI stays free, Finance Ministry bars charges on transactions up to Rs 2,000
• Business Today: NPCI to discuss MDR rates for UPI transactions above Rs 2,000 today, say sources
• Inc42: Govt notifies new rules, no MDR for UPI payments under Rs 2,000
• DD News: NPCI raises daily UPI payment limit on P2M transactions to Rs 10 lakh
• Razorpay: UPI Transaction Limit Per Day in 2026, Bank-Wise Daily UPI Limits