The Unified Payments Interface (UPI), developed by the National Payments Corporation of India (NPCI), continues to revolutionize the digital payment ecosystem in India. With over 1,300 crore transactions processed monthly, UPI is the backbone of real-time financial transfers across the country. To further enhance security, improve system efficiency, and streamline user experience, the NPCI has announced a set of New UPI Rules 2025, effective from August 1, 2025. These rules will impact balance checks, autopay mandates, wallet-based transactions, and account linking limits—making it essential for both users and merchants to stay informed and prepared.
What Is a Prepaid Payment Instrument (PPI) in UPI?
A Prepaid Payment Instrument (PPI) is a digital wallet or tool that allows users to load money and make real-time online payments. These include:
- Mobile wallets: PhonePe, Paytm, Amazon Pay, Freecharge
- Gift cards and vouchers
- Smart cards and magnetised chips
When you use a wallet to scan a UPI QR code (instead of a direct bank account), the transaction is considered a PPI-based UPI payment.
New UPI Rules 2025: Operational Guidelines You Must Know
NPCI has announced several rules that all UPI-enabled apps like Google Pay, PhonePe, Paytm, and BHIM must follow. Here’s what’s changing:
1. Balance Check Limit
- You can check your bank balance up to 50 times per day on each UPI app.
- Exceeding this cap will disable the feature for 24 hours on that app.
2. Auto-Balance Display
- After each successful transaction, your updated bank balance will be shown automatically—saving time and reducing unnecessary checks.
3. Account Linking Cap
- You can link or fetch up to 25 bank accounts per day per UPI app.
4. Transaction Status Checks
- You can check the status of a pending transaction only 3 times, with a mandatory 90-second gap between attempts.
5. Auto-Debit Processing Window
- Autopay mandates (for EMIs, SIPs, subscriptions) will only be processed:
- Before 10:00 a.m.
- After 9:30 p.m.
6. Payee Name Display
- Before transferring money, your UPI app must show the recipient’s registered bank name, reducing fraud risk and improving clarity.
UPI Transaction Limits in 2025
The standard UPI transaction limit is ₹1 lakh per day, but this varies by bank. Certain transactions are allowed higher caps:
| Purpose | Limit |
| Capital markets, insurance, inward remittance | ₹2 lakh |
| Education, hospitals, tax, IPOs, RBI schemes | ₹5 lakh |
Example: IDFC Bank allows ₹1 lakh per week and ₹30 lakh per month via UPI.
Always check your bank’s individual policy for specific daily, weekly, or monthly limits.
UPI Interchange Fees on Wallet-Based Transactions
What Is the Interchange Fee?
When you pay via a digital wallet (like PhonePe Wallet) instead of a direct bank UPI ID, interchange fees may apply—only for merchant transactions above ₹2,000.
This fee is:
- Paid by merchants to the wallet provider (not by users).
- Similar to MDR on card transactions.
- Meant to compensate service providers for transaction processing.
Interchange Fee Structure (2025)
| Category | Fee |
| Fuel | 0.5% |
| Telecom, utilities, post office | 0.7% |
| Agriculture and education | 0.7% |
| Supermarkets | 0.9% |
| Insurance, mutual funds, railways | 1.0% |
Merchants using PPIs like PhonePe or Paytm for collections above ₹2,000 will bear this cost. Personal users do not pay any fees.
Wallet Loading Charges
If you recharge your wallet with more than ₹2,000, the wallet provider (e.g., PhonePe) must pay 0.15% wallet loading charge to the user’s bank. This does not affect the customer, and no additional fee will be deducted from your end.
Are UPI Transactions Free Under the New UPI Rules 2025?
- ✅ Yes, for individuals using UPI via a bank account for personal use.
- ✅ No charges for P2P (peer-to-peer) and P2M (peer-to-merchant) payments.
- ❌ Only merchants may incur charges on wallet-based UPI transactions above ₹2,000.
- ❌ No charges for wallet top-ups from a user’s perspective.
New UPI Rules 2025 and Their Impact on Autopay for Insurance & SIPs
If you’ve set up UPI Autopay for insurance premiums, SIPs, or bills, here’s what changes:
- All autopay mandates will now execute only between 12:00 a.m. and 7:00 a.m.
- You get 1 attempt + 3 retries (total of 4 chances) for each payment.
You don’t need to take any action—the merchant must adjust their mandate schedule. However, it’s a good practice to:
- Set payment alerts
- Monitor your bank balance periodically (within the 50-check/day limit)
Penalties for Non-Compliance (For Apps, Not Users)
UPI app providers must implement the new rules by July 31, 2025. Non-compliance could lead to:
- API restrictions
- Monetary penalties
- Suspension from onboarding new customers
These actions are meant to enforce discipline among service providers and do not affect regular UPI users.
Final Checklist for UPI Users
✅ Avoid checking balances more than 50 times/day
✅ No action needed for existing autopay mandates
✅ Use bank-linked UPI for free transactions
✅ Merchants should prepare for interchange fees if using wallets
✅ Stay updated through your UPI app’s alerts
Conclusion
The new UPI rules effective from August 1, 2025, bring a mix of enhanced security, regulated usage, and merchant-level cost structures. For regular users, UPI remains fast, free, and reliable. For merchants, especially those accepting large wallet payments, it’s time to adapt and inform customers about any changes in payment acceptance.
As India continues to lead in digital payments innovation, staying informed ensures you get the best out of UPI—securely and seamlessly.