UPI payment limit to hospitals, educational institutes raised to Rs 5 lakh

The Reserve Bank of India (RBI) on Friday announced that the Unified Payments Interface (UPI) payment limit for hospitals and educational institutions would be raised to Rs 5 lakh per transaction from Rs 1 lakh presently.

The limit for a UPI transaction is currently capped at Rs 1 lakh except in a few categories like capital markets and collections, which include credit card payments, loan repayments, and insurance, among others, where the transaction limit is capped at Rs 2 lakh.

“To encourage the use of UPI for medical and educational services, it is proposed to enhance the limit for payments to hospitals and educational institutions from Rs 1 lakh to Rs 5 lakh per transaction. Separate instructions will be issued shortly,” the regulator said in a statement.

The hospital and education industry have cheered the regulator’s move on hiking the transaction limit on UPI.

“As a leading healthcare provider, Fortis Healthcare sees this as a positive development that will streamline payment processes and also ensure transparency. This significant enhancement is a progressive step towards facilitating larger transactions, particularly in the healthcare sector,” said Vivek Kumar Goyal, chief financial officer, Fortis Healthcare Limited.

Players in the financial sector believe increasing the transaction limit would assist users in making large value payments that are time-sensitive.

 “Due to the ease of payments, UPI is emerging as a preferred mode of payments for not only small-value transactions but also for large-value transactions. The transaction limit would no longer be a bottleneck that refrains a user from using UPI, especially when it comes to payments which are urgent in nature,” said Mandar Agashe, founder and managing director, Sarvatra Technologies; a payment and banking solutions provider.

Similarly, participants in the edtech sector expect the announcement to apply to players involved in digital upskilling and online education space.

 “It should logically include online education players. However, we need to wait for the National Payments Corporation of India (NPCI) guidelines to give a formal confirmation,” a person from the edtech industry requesting anonymity said. 

Companies involved in the education sector have welcomed the move stating it will help individuals save on credit card transaction fees. 

“This will enable students to make payments via UPI. This saves credit card transaction fees and any bank transfer charges which helps the entire ecosystem. Also given how ubiquitous UPI is, it will enable payments for many students who may not have access to credit cards or other modes of payment," said Mohan Kannegal, CEO - India and APAC, Emeritus, an edtech company. 

 “Today’s announcement by RBI on increasing the transaction limits of UPI from Rs 1 lakh to Rs 5 lakh for hospitals and educational institutions will help consumers do larger transactions, potentially facilitating smoother and more substantial payments in these two crucial sectors,” said Ramesh Narasimhan, CEO, Worldline India.