In a recent development, the National Payments Corporation of India (NPCI) has mandated banks and payment service providers (PSPs) to comply with the directive set by the banking regulator by January 10th. The directive seeks to elevate the UPI transaction limit to Rs 5 lakh specifically for transactions related to hospitals and educational services, according to reports from Business Standard.
NPCI is actively encouraging banks, PSPs, and UPI applications to modify their transaction limits, focusing on specific business categories in accordance with the updated directive. This revision translates to a substantial increase in the transaction limit for activities associated with hospitals and educational services, now reaching Rs 5 lakh, a significant jump from the previous limit of approximately Rs 1 lakh.
Vishwas Patel, Joint Managing Director of Infibeam Avenues, views this as a positive stride, particularly given the escalating average transaction size in these sectors. He expresses confidence that effecting these changes by the stipulated date of January 10th should not present substantial challenges.
PhonePe has also affirmed its commitment to implementing the necessary adjustments for users within the provided timeline.
It’s crucial to note that the heightened transaction limit of Rs 5 lakh is applicable exclusively to “verified merchants.” In a circular, NPCI has urged its members, including PSPs, banks, UPI apps, and merchants, to take cognizance of this enhancement and effect the required modifications. Compliance with these updates is anticipated by January 10, 2024.
Merchants are obligated to activate UPI with these enhanced limits, and the responsibility for verifying and adding merchants to the verified list rests with acquiring entities after conducting due diligence.
PhonePe has clarified its role as a third-party application provider (TPAP), emphasizing that they do not handle the due diligence for merchants. This responsibility lies with the merchant acquirer. However, PhonePe, in its role as an acquirer, also maintains an internal due diligence process to ensure alignment with regulatory requirements.