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Introduction: The National Payments Corporation of India (NPCI) has been pivotal in revolutionizing the payment landscape in the country. In its endeavor to foster a robust ecosystem for merchant payments, NPCI has issued a crucial circular regarding the implementation of maximum UPI inward credit limits for P2PM (Peer-to-Peer Merchant) transactions. This directive aims to streamline and enhance the efficiency of merchant payments, particularly for small-scale businesses and the unorganized retail sector.

Detailed Analysis:

The circular, NPCI/UPI/OC no. 19212023-24 dated 28th March 2024, underscores the significance of UPI as a preferred payment method for merchant services. It delineates the evolution of the P2PM category introduced through earlier circulars, aimed at incorporating small merchants with low transaction volumes into the digital payment framework.

Building upon prior guidelines, NPCI mandates Acquiring Banks and Payment Service Providers (PSPs) to adhere to prescribed maximum UPI inward credit limits for P2PM merchants. These limits, outlined as per transaction, cumulative daily, and cumulative monthly thresholds, seek to maintain financial prudence while facilitating merchant transactions.

Acquiring Banks and PSPs are required to ensure the implementation of these limits and confirm compliance by 30th April 2024. Furthermore, merchants exceeding a monthly UPI inward credit of Rs. 1,00,000 for three consecutive months must undergo formal acquisition by the Payee PSP under the P2M (Peer-to-Merchant) category, with applicable Merchant Category Codes (MCCs).

The circular emphasizes NPCI’s commitment to ensuring compliance and reserves the right to penalize non-compliant entities, underlining the seriousness of adherence to these directives.

Conclusion: The implementation of maximum UPI inward credit limits for P2PM merchants signifies NPCI’s proactive stance towards fostering a sustainable and inclusive digital payments ecosystem. By delineating clear guidelines and enforcing compliance measures, NPCI aims to strike a balance between facilitating merchant transactions and safeguarding financial integrity. This directive is poised to instill confidence among stakeholders and pave the way for continued innovation and growth in India’s digital payments landscape.

***

NATIONAL PAYMENTS CORPORATION OF INDIA

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

UPI has emerged as a preferred payment method for merchant payment services thereby creating a need to provide a sustainable ecosystem for merchant payments and its widespread adoption.

Vide circular NPCI/UPI/0C-7012019-20 dated 17th June 2019, a new category “P2PM” catering to small merchants and unorganised retail sector was introduced to bring small merchants with low ticket size into the digital framework along with the onboarding guidelines required to be followed by Acquirers. Further, vide circular NPCI/UPI/OC-72/2019.20 dated 30th August 2019, NPCI shared revised guidelines for P2PM category on changes in monthly inward credit limits and stated that P2PM category is applicable only for merchants receiving instant credit for UPI payments into their own account.

In addition to the guidelines referred above and considering the constantly expanding merchant ecosystem;

1. Acquiring Banks / PSPs shall ensure implementation of the maximum UPI inward credit limits allowed for P2PM merchants as prescribed below and confirm compliance before 30th April 2024.

Particulars Maximum UPI inward credit to 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

2. Merchants with UPI payment inward credit of Rs. 1,00,000 per month or more consecutively for three months must be formally acquired by the Payee PSP under P2M category with applicable MCC.

NPCI reserves the right to penalize and take necessary action against the Acquiring Banks / PSPs in case of non-compliance.

Yours Sincerely,

SD/-

Kunal Kalawatia
Chief of Products

1001A, The Capital, B Wing, 10th Floor,
Bandra Kuria Complex, Bandra (E), Mumbai 400 051.
T: +91 22 40009100 F: +91 22 40009101
contact@npci.org.in www.npci,org.in
CIN: U74990MH2008NPL189067

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