finance
The National Payments Corporation of India (NPCI) plays a vital role in transforming the payment ecosystem within the country. In its ongoing efforts to enhance the merchant payment framework, NPCI has issued a significant circular concerning the maximum UPI inward credit limits for Peer-to-Peer Merchant (P2PM) transactions. This initiative is particularly aimed at improving the efficiency of payments for small businesses and the unorganized retail sector.
The circular referenced as NPCI/UPI/OC no. 19212023-24, dated 28th March 2024, highlights the increasing preference for UPI as a method of payment for merchant services. It further outlines the development of the P2PM category introduced through earlier circulars, which encourage the integration of small merchants with lower transaction volumes into the digital payment landscape.
As an extension of prior directives, NPCI has established that Acquiring Banks and Payment Service Providers (PSPs) must comply with the specified maximum UPI inward credit limits for P2PM merchants. These limits are detailed across three categories: per transaction, cumulative daily, and cumulative monthly thresholds. The primary goal is to ensure responsible financial practices while facilitating merchant transactions.
The circular reaffirms NPCI’s commitment to enforcing compliance, alongside the authority to impose penalties for non-compliance, emphasizing the importance of adherence to these rules.
The introduction of maximum UPI inward credit limits for P2PM merchants illustrates NPCI’s proactive approach to cultivating a sustainable and inclusive digital payments ecosystem. By providing explicit guidelines and enforcing compliance provisions, NPCI aims to balance the facilitation of merchant transactions with the need for financial integrity. This directive is likely to bolster stakeholder confidence, promoting ongoing innovation and growth in India's digital payments sector.
NPCI/UPI/OC no. 19212023-24
Dated: 28th March 2024
To,
All Members, Unified Payments Interface
Dear Sir/Madam,
Subject: Implementation of maximum UPI inward credit limits for P2PM merchants
Recognizing the emergence of UPI as a favored payment method for merchant services, there arises a necessity to foster a sustainable ecosystem for merchant transactions and their widespread adoption.
In circular NPCI/UPI/0C-7012019-20 dated 17th June 2019, a new category called "P2PM" was introduced to accommodate small merchants and the unorganized retail sector. This initiative was designed to integrate small merchants with limited transaction sizes into the digital economy, along with onboarding guidelines for Acquirers. Further updates were shared in circular NPCI/UPI/OC-72/2019-20 on 30th August 2019, revising monthly inward credit limits and clarifying that the P2PM category is relevant only for merchants receiving immediate credit for UPI payments to their accounts.
In light of these previous guidelines and the continually growing merchant ecosystem, the following measures must be implemented:
Acquiring Banks/PSPs must ensure compliance with the maximum UPI inward credit limits for P2PM merchants as outlined below, with confirmation of adherence required by 30th April 2024:
| Particulars | Maximum UPI inward credit for P2PM merchant VPA (in Rs.) |
|---|---|
| Per transaction | Rs. 10,000 |
| Cumulative per day [24 hours] | Rs. 25,000 |
| Cumulative per month [30 days] | Rs. 1,00,000 |
Merchants receiving UPI payment inward credits of Rs. 1,00,000 or more per month consecutively for three months must be formally acquired by the Payee PSP under the P2M category, utilizing the applicable MCCs.
NPCI reserves the right to impose penalties and take corrective actions against Acquiring Banks and PSPs in cases of non-compliance.