--- title: 'PhonePe Transaction Limits and Fees: Merchant Guide' description: 'Understand PhonePe transaction limits and fees before accepting UPI payments. Explore daily caps, high-value merchant categories, zero-MDR vs card fees, and the 2026 rules.' url: 'https://www.unlimit.com/blog/payments/phonepe-transaction-limits-and-fees-what-businesses-accepting-upi-need-to-know/' image: 'https://cdn.unlimit.com/wp-content/uploads/2026/10/16123524/COVER-PhonePe-Transaction-Limits-And-Fees_-What-Businesses-Accepting-UPI-Need-To-Know.png' language: en published: '2026-09-23T12:33:55+00:00' modified: '2026-10-16T12:40:00+00:00' categories: - Payments --- > The index of this site for AI agents is at https://www.unlimit.com/llms.txt # PhonePe Transaction Limits And Fees: What Businesses Accepting UPI Need To Know [PhonePe](https://www.unlimit.com/blog/payments/blog-phonepe-for-business-guide/) is one of India’s largest Unified Payments Interface (UPI) apps. UPI is a real-time payment system, developed by the National Payments Corporation of India (NPCI) and regulated by the Reserve Bank of India (RBI). It facilitates instant money transfers between peer-to-peer (P2P) and person-to-merchant (P2M). PhonePe’s transaction limits and fees depend on rules and charges set by the NPCI, the customer’s bank, and the payment app itself. ## Key takeaways - The standard UPI transaction limit is 1,00,000 INR per day for both person-to-person transfers and standard merchant payments. The limit applies across all UPI apps and resets on a rolling 24-hour basis. - Verified merchants in specific high-value categories, including capital markets, insurance, travel, education, healthcare and government, can accept up to 5,00,000 INR per day. - From 15 October 2026, a 0.4% Merchant Discount Rate (MDR) will apply to selected merchant payments above 2,000 INR. - RuPay credit cards linked to UPI carry a separate merchant-side fee for transactions, which can vary by merchant category and card acceptance arrangements. - Transaction limits and fees can vary by bank, KYC tier, and merchant category. Businesses should confirm the current limit and applicable charges for their specific setup. ## What are PhonePe transaction limits and fees? The NPCI sets the overarching limits and rules for the UPI network, which every UPI app must follow. Additionally, the customer’s bank sets its own limits, which can match the NPCI ceiling or be more restrictive, but can’t exceed it. PhonePe operates within the limits set by the bank and the wider UPI network, but may apply its own risk controls, such as new-user limits and fraud monitoring, which can affect how a transaction is processed. ### How UPI works on PhonePe? UPI transaction limits are decided by three distinct parties as follows: 1. **NPCI:** Operates the UPI network and sets its network-wide rules, transaction ceilings and category-specific exceptions. Every participating bank and UPI app has to operate within these limits. 2. **Customer’s bank:** Applies its own transaction policy within the NPCI ceiling. Some banks, such as SBI, ICICI Bank, and HDFC, use the full 1,00,000 INR standard limit, while other banks impose lower limits based on their own risk controls or internal policies. 3. **PhonePe:** Provides the payment interface, applies additional fraud and risk checks, and reflects the limit the bank has authorised for the linked account. Even if a customer has a long transaction history with PhonePe, the app cannot raise the account’s UPI limit beyond what NPCI and the bank permit. ## PhonePe/UPI transaction limits ## The standard UPI transaction limit For most users and merchants, the maximum UPI transaction limit is 1,00,000 INR per day. This daily limit applies across person-to-person transfers and standard merchant payments. The limit resets on a rolling 24-hour basis from the user’s first transaction, rather than at a fixed time. Higher limits are available for certain high-value categories, but they aren’t a general benefit that increases with account age, transaction history, or PhonePe usage. ## New users and the 5,000 INR first-day limit New PhonePe users, as well as existing users who recently linked a new bank account or switched to a new device, may face a 5,000 INR total transaction cap during their first 24 hours. This is a fraud-prevention measure within the UPI system, and not a PhonePe-specific limit. The cap lifts automatically after 24 hours, and the account reverts to the standard UPI limit. A new PhonePe user paying for a purchase of over 5,000 INR may see the payment declined because of this temporary limit. Merchants should offer [alternative payment methods](https://www.unlimit.com/payment-methods/) at checkout to avoid losing the sale. ## Bank-specific limits and the 20-transaction count cap A customer’s bank can set a UPI transaction limit below the NPCI’s 1,00,000 INR ceiling based on its risk policies. Customers should check their bank’s current policy rather than assume their account has the full NPCI limit. NPCI also caps users at roughly 20 UPI transactions within a rolling 24-hour period, regardless of how much of the INR limit they have used. A payment can therefore fail because the customer has reached the transaction-count limit even when there is still plenty of room under the monetary ceiling. ## High-value merchant categories From [15 September 2025](https://timesofindia.indiatimes.com/business/india-business/upi-gets-major-upgrade-daily-transaction-raised-to-rs-5-lakh-for-select-categories-check-who-benefits/articleshow/123937468.cms), NPCI increased the person-to-merchant transaction limit to 5,00,000 INR per transaction with a 10,00,000 INR daily aggregate limit for verified merchants in specific high-value categories, including capital markets, insurance, travel, education, healthcare, and government e-marketplaces. Credit card bill payments have a lower daily aggregate of 6,00,000 INR, while retaining the same 5,00,000 INR per-transaction ceiling. These higher limits don’t apply to standard person-to-person transfers, which remain subject to the standard 1,00,000 INR limit, regardless of the customer’s transaction history. Businesses must ensure that their merchant category code (MCC) qualifies for a higher limit and that their bank or payment partner has enabled the relevant verified-merchant status. ## Merchant payments vs person-to-person limits Standard P2P transfers, where one individual sends money to another, are subject to the 1,00,000 INR limit. No category-based exceptions allow individuals to unlock a higher personal-transfer limit. However, eligible merchants in specific high-value categories can avail higher P2M payment limits. Businesses can check their eligibility by consulting their payment service provider to confirm their merchant category and acceptance status. It’s also worth keeping alternative payment methods, such as [cards](https://www.unlimit.com/blog/payments/credit-cards-vs-debit-cards-what-merchants-need-to-know-when-accepting-payments/) or [bank transfers](https://www.unlimit.com/blog/payments/how-do-bank-transfers-work-what-should-businesses-know/), available in case a UPI payment fails. ## UPI Lite and small-value payments UPI Lite is a separate payment mechanism from standard UPI that was designed for frequent, low-value payments while reducing the need for full bank-level authentication on every transaction. It works as an on-device wallet within a supported UPI app, allowing users to make low-value payments without entering their UPI PIN for every transaction. UPI Lite supports transactions of up to 1,000 INR each, while the wallet can hold up to 5,000 INR at any point in time. The standard daily transaction limit is 10,000 INR. UPI Lite transactions operate separately from the standard UPI limits. Outgoing Lite payments don’t count toward the 1,00,000 INR standard UPI daily value limit or the 20-transaction count limit. For merchants, UPI Lite is most relevant to low-ticket purchases, where a faster, PIN-light checkout can reduce payment friction. ## PhonePe transaction fees, MDR, and UPI charges PhonePe doesn’t charge users for creating a PhonePe account. The other applicable fee depends on how the customer funds the payment: - **Bank-account UPI up to 2,000 INR:** For both P2P and P2M transactions funded directly from a bank account, the MDR is zero up to 2,000 INR, according to the Finance Ministry. - **Bank-account UPI P2M above 2,000 INR:** From 15 October 2026, a new [0.4%](https://financialservices.gov.in/sites/default/files/2026-09/FAQs---Merchant-Discount-Rate--MDR--on-Select-UPI--P2M--Transactions_0.pdf) MDR, capped at 300 INR per transaction, will apply to selected P2M payments above 2,000 INR. Businesses receiving up to 1,00,000 INR per month through UPI QR codes will be exempt from the new MDR, regardless of the value of an individual transaction. - **PPI-funded UPI payments above 2,000 INR:** Payments made through a prepaid payment instrument (PPI) or wallet follow a separate pricing mechanism. An interchange fee, commonly cited at around [0.5% to 1.1%](https://www.dbs.bank.in/digibank/in/articles/save/upi-transaction-limit), may apply to the merchant because the transaction is funded through a wallet rather than directly from a bank account. - **RuPay credit card payments through UPI above 2,000 INR:** The 0.4% MDR doesn’t apply to RuPay credit card-linked UPI payments. Instead, these transactions have their own [merchant-side MDR](https://www.indusind.bank.in/iblogs/savings-account/upi-payment-new-rules-2026/), and the applicable rate can vary by merchant category and card acceptance arrangements. Convenience fees may also apply on some credit card bill or debit card bill payment flows, depending on the instrument and biller setup. ### Who pays UPI fees: customer vs merchant Customers don’t pay an additional fee for standard UPI payments. Any applicable MDR or interchange fee is a merchant-side cost, deducted from the merchant’s settlement rather than added to the customer’s checkout amount. ## Wallet transfers vs bank-account transfers The PhonePe wallet is a separate payment rail from bank-account UPI. It operates under the RBI’s PPI framework rather than the standard UPI framework. Hence, its limits are determined by the user’s KYC status and not the standard UPI transaction ceiling. A PhonePe wallet user who has completed minimum KYC verification can add and hold up to 10,000 INR per month under the applicable wallet limits. Completing the KYC increases the maximum wallet limit to 2,00,000 INR and removes the fixed monthly top-up restriction. These wallet limits operate independently of the user’s bank-account UPI limit. For instance, a user who has reached the applicable PhonePe wallet limit can still make UPI payments from their linked bank account. ## The new UPI rules for 2026: what businesses should know From 15 September 2025, NPCI increased the limits for verified merchants in specific high-value categories to up to 5,00,000 INR per transaction and 10,00,000 INR per day. NPCI also introduced tighter API-level controls through August 2025 affecting how apps and payment integrations handle balance enquiries and retries. These include a limit of [50](https://www.dbs.bank.in/digibank/in/articles/save/upi-transaction-limit) manual balance enquiries per app per day. Additionally, the RBI has continued strengthening authentication requirements for digital payments. UPI PIN authentication remains the baseline, with biometric authentication available as an additional factor where supported. For merchants, the most significant change is the 0.4% MDR on eligible UPI payments above 2,000 INR, effective 15 October 2026. ## How to check PhonePe limits, transaction history, and UPI ID 1. Open PhonePe and go to the profile or account section. 2. Check linked bank accounts to see which account is currently being used for UPI payments. UPI limits are generally tied to the linked bank account and its bank’s policies, not the PhonePe app. 3. Review transaction history from the home screen or profile menu. Check recent payments, their status, and the amounts already processed to understand how much of the applicable limit has been used. 4. Find the UPI ID (VPA) under profile or bank account details. This payment identifier is separate from the registered mobile number and is what others use to send money. 5. Test a transaction near the expected limit if required to establish the actual limit applying to the account. If the payment is declined, PhonePe may display an error indicating the relevant limit or restriction. ## Fixing transaction limit exceeded and failed payments For businesses, reducing avoidable UPI checkout declines depends on the underlying restriction: 1. **Determine whether it is a value or transaction-count limit.** A payment may fail because the customer has reached the 1,00,000 INR value ceiling or the applicable 20-transaction count limit. These are separate restrictions and require different troubleshooting. 2. **Check for the new-user cap.** Customers making their first transactions, or those who have recently linked a new bank account or switched devices, may be subject to a 5,000 INR limit for their first 24 hours. 3. **Check the merchant category.** If a payment above 1,00,000 INR fails despite falling within a category eligible for the higher UPI limit, check whether the merchant’s category registration and verified status have been correctly configured. 4. **Direct bank-level issues to the customer’s bank.** If the customer’s account limit is below the applicable NPCI ceiling, contact their bank. PhonePe can’t override a bank-imposed restriction. 5. **Keep an alternative payment method available.** For time-sensitive or high-value purchases blocked by a UPI limit, offering cards or bank transfer gives the customer another way to complete the payment. ## Can PhonePe transaction limits be increased? With PhonePe wallet, the applicable wallet balance limit can be raised to 2,00,000 INR by completing the KYC. With standard UPI limits, the customer can request or enable a higher limit through their bank, provided the bank offers a higher account-level UPI limit. Limits such as the standard 1,00,000 INR ceiling, or the higher limits available to qualifying merchant categories, are set at the network level. An individual customer, merchant, bank or UPI app can’t request a higher NPCI ceiling for a particular account. ## What PhonePe limits and fees mean for a business Most everyday e-commerce orders fall below the 1,00,000 INR standard UPI limit. Meaning, these restrictions rarely prevent a checkout. However, they can affect conversions when the buyer is a new PhonePe user or someone who has reached the transaction-count limit, or when the business is processing high-value payments. For merchants in high-ticket sectors, confirming their eligibility for the 5,00,000 INR high-value P2M tier in advance can help avoid surprises during checkout. Bank-account UPI remains a low-cost payment method even after the introduction of the new applicable MDR framework. Payments up to 2,000 INR remain free, while eligible bank-account P2M payments above that threshold are subject to a 0.4% MDR from 15th October 2026. Here’s a practical checklist for businesses accepting PhonePe or other UPI payments: - Build checkout flows around the new-user and transaction-count limits - Make sure the payment provider distinguishes between bank-account UPI, PPI, and RuPay credit-on-UPI when calculating merchant costs - Confirm whether the business’s merchant category qualifies for higher-value UPI limits before assuming every payment above 1,00,000 INR must be split or redirected - Keep an alternative payment method available for customers whose UPI payment is blocked by an account- or transaction-level restriction. For global businesses, [accepting PhonePe](https://www.unlimit.com/blog/payments/blog-payments-phonepe-for-merchants/) and UPI doesn’t necessarily require separate payment integrations. [Unlimit](https://www.unlimit.com/) supports UPI, RuPay, card, and other [local payment methods](https://www.unlimit.com/coverage/india/india/) for Indian customers through a single integration, with local INR settlement under its RBI Payment Aggregator and cross-border (PA-CB) licences. [Start accepting UPI payments from Indian customers with Unlimit](https://www.unlimit.com/?product=payments) ## FAQ **Why can’t I send more than 5,000 INR on PhonePe as a new user?**The 5,000 INR cap is a UPI fraud-prevention measure. New UPI users, as well as users who have recently linked a new bank account or switched devices, may be subject to a 5,000 INR limit for their first 24 hours. After that period, the temporary cap is lifted, and the standard UPI limit of 1,00,000 INR per day applies. **Are there any charges on PhonePe transactions?**For customers, standard bank-account UPI payments do not carry an additional charge. For merchants, bank-account UPI payments up to 2,000 INR remain free, while a new 0.4% MDR, capped at 300 INR per transaction, applies to eligible payments above 2,000 INR from 15 October 2026. PPI- or wallet-funded payments and RuPay credit card payments through UPI follow separate merchant-side fee structures. **Can I transfer 3,00,000 INR through PhonePe?**The standard UPI ceiling is 1,00,000 INR, while verified merchants in specific high-value categories, such as capital markets, insurance, travel, healthcare, education, and government, can accept payments up to 5,00,000 INR per transaction. **What are the new UPI rules for PhonePe users in 2026?**The most significant change for merchants is a 0.4% MDR that applies to eligible UPI payments of over 2,000 INR, effective 15 October 2026. Small merchants receiving up to 1,00,000 INR per month through UPI QR codes remain exempt from the new MDR. **Does PhonePe charge merchants to accept payments?**Bank-account UPI payments up to 2,000 INR remain free, and eligible small merchants receiving up to 1,00,000 INR per month through UPI QR codes are exempt from the new MDR. From 15 October 2026, payments above 2,000 INR are subject to a 0.4% MDR, capped at 300 INR per transaction. PPI- or wallet-funded payments and RuPay-credit-linked UPI transactions have separate merchant-side charges, which the payment service provider or gateway handling the transaction collects.