Solution: You have exceeded the maximum transaction limit set by your bank!!

It is not frequent, but sometimes you can encounter the message “You have exceeded the maximum transaction limit set by your bank”. You can also see the message “You have reached the UPI payment limit set by your bank”. It applies a sudden brake on your otherwise smooth UPI Payments. This can happen whether you are using Phonepe, Google Pay or Paytm.

Why does this happen? How can we deal with such messages? In this post, I will tell you all about the UPI Limit issue. I will also tell you the scenario when limit would be very high.

The problem of limit exceeding arises due to the regulations imposed by NPCI (National Payments Corporation of India) and banks. Let us go through the different types of limits applied to UPI transactions.

1. Maximum Transfer Limit per day

UPI provides the most convenient payment system, surpassing other fund transfer methods in terms of ease of use.

However, this convenience also brings the risk of fraud. You may have encountered or heard about UPI fraud. To safeguard customers from such losses, NPCI has established a maximum limit for fund transfers.

You can’t pay more than ₹1 lakh in a day through the UPI payment system. This limit is enforced by the UPI platform provider, NPCI, and is applicable to all banks and apps operating on the UPI platform.

The limit of ₹ 1 lakhs is applicable for the P2P Transactions. There is higher limit for P2M transactions. I have given below the details of P2M payments.

2. Limit Applicable on Bank Account

Please note the maximum limit of ₹1 lakh is applicable at the bank account level. So, there can’t be a UPI debit of more than one lakh from an account. The limit applies irrespective of the UPI apps. It does not matter whether you make payment from one app or multiple UPI apps.

Suppose, you have one SBI account. But you have installed the Google Pay, Phonepe and Paytm apps. All of these apps are linked to your SBI Account.

You transfer 50 thousand through Google Pay. Next, you again transfer 50 thousand using Phonepe. Now if you again try the transfer any amount through Paytm, the following message will appear.

"you have exceeded the maximum transaction amount set by your bank"

3. What is ‘A Day’ for UPI Limit

A lot of people complained that they could not transfer the amount in spite of being within the limit of ₹1 lakh.

This happens because they consider a day with the change of date. While the UPI limit applies for 24 hours. The Change of date does not matter.

Hence, if you see the ‘limit exceed message’, add the amount of all the transfers during the last 24 hours. Does the sum of all the amounts less than ₹1 lakh? if not, you will not be able to make further payments

Suppose, you have transferred 1 lakh at 5 PM on 23 August. The next day at 10 AM, you again try to transfer 50 thousand. This transaction would not go through as the total transaction within 24 hours would become ₹1,50,000. So to make the payment of ₹50 thousand, you have to wait till 5 PM.

4. Limit on number of transactions per day

Are you also aware of this limit? Sometimes this limit can also spoil your effort. There is a limit of 10 UPI transactions in a day. This limit also applies to the bank account.

In this case, as well, a day means the last 24 hours. So, if your transaction is declined, count the number of transactions in the last 24 hours.

However, any payment made to the merchant is not counted in the limit of 10 transactions.

5. Why There is a Limit?

So, now you know why you could not make a payment. But you may be wondering why there is a limit in the first place.

In fact, you may be aware that many people were misusing the UPI payment system for cashback. People were making several payments of low value just to be eligible for the cashback. But banks incur some costs with every transaction. They are not charging that cost but they have to bear that. That is why they started to limit the transaction. Finally, NPCI itself applied a limit. The NPCI manages the UPI payment system.

Also, fraudsters are using the UPI Payment system to cheat gullible people. So, the transaction limit protects people from the big loss.

6. Relaxations on UPI LImit

Lately, NPCI has given some relaxation on UPI Payments. The limit is higher for certain types of payments.

1. There is limit of ₹2 lakh per 24 hour for the merchant payments.
2. There is no limit on number of transactions for themerhant payments.
3. The limit of investment in IPO or government bonds is ₹5 lakh per 24 hours.
4. You can also make payment of upto ₹5 lah if paying for the hospital and educational institutes.
5. You can make bill payments of up to ₹2 lakhs through the UPI Apps.
6. You can also pay insurance premiums and credit card bill payments up to ₹2 lakhs .

The UPI also has limits for the UPI pay later and UPI lite. To know more about these limits, you can read another post titled UPI Payment Limits of the banks.