Introduction
India’s Unified Payments Interface (UPI) has revolutionized digital payments, becoming the most widespread and trusted mode of money transfer since its launch. UPI Transaction Limit October 2025, the National Payments Corporation of India (NPCI) introduced important updates that raise transaction limits for verified merchants, enhance fraud prevention, and reshape certain payment features. These changes reflect UPI’s evolution towards catering to larger-ticket transactions while mitigating security risks comprehensively.
Raised Transaction and Daily Limits for Verified Merchants
From mid-September 2025, NPCI raised the UPI transaction limits for verified merchants in selected key sectors, including insurance premiums, capital market investments, credit card bill payments, travel bookings, and government payments. The per-transaction limit is now ₹5 lakh, with a daily cap of ₹10 lakh—substantially higher than the earlier ₹1 lakh threshold across most categories.
This increase enables seamless digital payments for high-value transactions typically conducted through offline channels or cheque payments, thereby boosting convenience, transparency, and record-keeping. For merchants, especially in sectors like travel and insurance, this opens up opportunities for digital transformation and enhanced customer engagement.
Discontinuation of Peer-to-Peer “Collect Requests”
A significant change introduced effective October 1, 2025, is NPCI’s discontinuation of the peer-to-peer (P2P) “collect request” (or pull transaction) feature. This feature allowed users to send payment collection requests, which often became a vector for fraudulent and unauthorized transactions.
UPI will now support only push transactions, where the payer initiates and authorizes payments. This move enhances security by limiting scenarios where users might accidentally authorize payments without sufficient control. While this may reduce some flexibility for casual peer payments, it strengthens the overall safety and trustworthiness of the UPI ecosystem.
Enhanced Security and Fraud Prevention Measures
The RBI has tightened regulations on payment aggregators and payment service providers, mandating stronger data security, fraud detection, and swift dispute resolution mechanisms. NPCI is deploying AI and machine learning tools to detect suspicious and fraudulent payments in real time, automatically blocking such transactions to protect consumers and merchants alike.
Further authentication enhancements include OTP requirements, transaction credit confirmations (TCC) to reduce chargebacks, and standardized complaint redressal frameworks ensuring faster resolution and customer satisfaction.
Impact of Real Money Gaming Ban on UPI Transactions
In response to regulatory actions, real money gaming (RMG) platforms have been banned or heavily restricted, leading to a substantial dip in UPI transaction volumes amounting to approximately ₹2,500 crore over a nine-day period in September 2025. While UPI overall crossed 20 billion transactions in the same period, this decline significantly impacted payment companies relying on gaming transactions for revenue.
Payment firms are recalibrating business models while regulators continue balancing user protection with digital payment growth.
Other Emerging Trends: EMI Defaults & Device Locking
The RBI is assessing proposals allowing lenders to remotely lock smartphones purchased on EMIs if borrowers default, contingent on borrower consent and privacy safeguards. This controversial move aims to strengthen repayment discipline and lower non-performing assets but requires careful implementation considering data privacy and consumer rights.
How These Changes Affect Users
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Higher per-transaction and daily limits for merchants mean heavy investments, taxes, and bills can be settled digitally without intermediaries.
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Removal of “collect payment” requests reduces risk of fraud but requires payers to actively authorize each payment.
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Consumers benefit from stronger fraud detection, automated dispute resolutions, and heightened data protection.
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Borrowers purchasing devices on credit should be aware of potential device locking provisions and their rights.
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Merchants in sectors like travel and insurance can expand digital adoption, improve customer convenience, and reduce reliance on cash.
Conclusion
October 2025’s UPI updates mark a maturing digital payment landscape in India: accommodating higher value transactions, protecting users from escalating fraud risks, and navigating evolving regulatory paradigms impacting gaming and EMI discipline. These reforms set a new security and efficiency benchmark for India’s flagship payments system, reinforcing consumer trust and financial inclusion for millions of users and businesses nationwide.