Today, Indian consumers use UPI apps for daily transactions, from as little as 1 rupee to 1 lac. In one day, they pay for their essentials, pay their bills/fees, purchase tickets, do shopping, and so much more until their per-day transaction cap is reached. However, this seamless journey may cease soon as NPCI is now in a discussion with RBI regarding the revised transaction limits on UPI apps.

Why is NCPI Going to Introduce New Transaction Limits?

Though UPI apps currently have the cap of the highest value spent each day; however, the number of transactions is still undefined. Initially, NCPI intended to help consumers adopt UPI rapidly, which is why they left the number of transactions undefined. There is no doubt that it has encouraged Indian users to use UPI more and more. The number of per day UPI transactions saw rapid growth due to the unlimited number of per day transactions.

But right now, the top UPI players, Google Pay and PhonePe, are suspecting some risks, so they have raised concerns about limiting the number of transactions each day. Google Pay and PhonePe hold 80% of India's UPI market. So, if any of these two apps face any technical glitches, thousands of transactions will be disrupted every single day.

On the other hand, limiting the number of transactions will ensure a balance and secure the transactions.

New Transaction Limits and the UPI Users

The updated transaction limits are only under discussion—they have not been finalized yet. However, NCPI has proposed a volume cap of 30% for third-party app providers like Google Pay and PhonePe. This cap indicates that one app can only process up to 30% of the total transactions within the period - not more than that.

This updated policy is likely to leave very little impact on casual UPI users. It means the users who pay smaller amounts at different times of the day will hardly see its impacts. However, users who are likely to make payments of larger sums can encounter some problems due to this policy.

Until and unless the exact chances come to the limelight, the impacts on the users will remain in suspense. So, we have to wait patiently until the discussion between RBI and NCPI ends. Only then someone can give an official statement regarding this.

No matter what changes they bring, they will be for the good and safety of the users. So, we have to respect the decision. And before implementing the updates, they will definitely take feedback to understand the possible reactions of the consumers. Only then can we get an official statement.

End words…

NCPI and RBI aim for a stronger, safer, and brighter UPI ecosystem for India. Just the way the payment gateways ensure the safety and security of all digital transactions, the new UPI transaction policies will also ensure that. In short, the new policies will be beneficial for the third-party app providers, users and broadly for the nation. Maybe in the future, we need to make a little bit of adjustment, and we have to be a little more calculative at the time of UPI transactions, that’s all.