UPI Rules Change From August 1: From New Limits To Autopay Timings & Others—Full List

Starting August 1, 2025: Major UPI Rules Are Changing—Here’s What You Must Know

Unified Payments Interface (UPI) has become the backbone of India’s digital payment ecosystem. As of 2025, nearly 85% of retail digital transactions in India are conducted via UPI. In a bid to enhance user experience, security, and compliance, the National Payments Corporation of India (NPCI) has introduced new rules effective from August 1, 2025.

Whether you’re a casual user or a business relying on UPI, here is the complete list of updates you should be aware of.

Why These Changes Are Being Implemented?

NPCI and RBI periodically review digital payment guidelines to:

• Enhance cybersecurity
• Prevent unauthorized transactions
• Encourage responsible usage
• Improve interoperability and user experience
• Ensure merchant and customer protection

 Full List of New UPI Rules Effective August 1, 2025

1. Revised Daily UPI Transaction Limit

• New limit for individual users: ₹1.5 lakh/day (earlier ₹1 lakh)
• For merchant accounts (approved businesses): Up to ₹5 lakh/day
• For education and healthcare payments: Up to ₹10 lakh/day

⚠️ Banks can impose lower limits based on customer profile and account type.

2. New Autopay Timing Window for Recurring Payments

• Autopay deductions (for OTT, insurance, EMIs, etc.) will now be processed only between 4:00 AM and 8:00 AM IST
• Helps users review or cancel a transaction before processing
• Notification will be sent 24 hours in advance for new mandates or renewals

3. Enhanced Authentication for High-Value Transactions

• UPI payments above ₹50,000 will now require:
  • Device binding verification
  • Face authentication or biometric verification (if enabled)
  • Additional OTP verification

🕵️ This ensures better security and fraud protection.

4. Auto-blocking Suspicious UPI IDs

• Any UPI ID flagged for suspicious or phishing activities will be auto-blocked for 72 hours pending verification
• Users will receive alerts and can appeal via the bank or UPI app support

5. Faster Refunds for Failed Transactions

• Timeline for refunds reduced from T+3 days to T+1 day
• Applies to transactions where:
  • Amount debited but not received
  • Technical failure or timeout
• Users will also receive auto-alerts once refund is processed

6. Inactive UPI Handles to Be Deactivated

• UPI IDs that have been inactive for 12 consecutive months will be auto-disabled
• Users will be notified 30 days before deactivation
• To reactivate: Just make any UPI transaction

7. Mandatory KYC for All UPI Wallets & Lite Wallets

• Lite UPI wallets (used for small ticket-size payments) must now undergo basic KYC by September 30, 2025
• Non-KYC wallets will be blocked from sending or receiving money

8. Introduction of UPI Pay Later Integration

• New rules to integrate Buy Now, Pay Later (BNPL) options within UPI ecosystem
• Customers will see a “Pay Later” option while scanning QR codes at partnered merchants
• RBI-approved NBFCs will provide credit

9. New “UPI Lite+” for Offline High-Value Transactions

• UPI Lite+, an upgraded version of UPI Lite, will allow offline payments of up to ₹2000 per transaction
• Designed for remote or low-internet regions
• Transactions to sync in real-time once internet resumes

10. Dynamic QR Code for All Offline Merchants

• All offline merchants must now implement dynamic QR codes that:
  • Change per transaction
  • Show exact billing amount
  • Expire after 5 minutes to avoid misuse

🌐 NPCI aims to phase out static QR codes by March 2026.

Impact on UPI Users: What You Need to Do

Task	Action Required
Daily users	Review and adjust daily limit in UPI app or via bank settings
Autopay users	Ensure payment mandates are set up with correct timing
High-value senders	Enable biometric/2FA authentication
Business owners	Upgrade to dynamic QR for offline payments
UPI Lite users	Complete basic KYC before Sept 30, 2025
Infrequent users	Make at least 1 UPI transaction per year to avoid deactivation

UPI Usage Statistics 2025

• ₹140 Lakh Crore+ processed in Q1 FY25
• 47 billion UPI transactions in June 2025 alone
• UPI now accepted in 10+ countries including Singapore, UAE, and France
• Over 34 crore active UPI IDs registered

UPI Apps That Have Already Updated Policies

• PhonePe
• Google Pay
• Paytm (for wallet-linked UPI)
• Amazon Pay
• BHIM
• CRED

Each app has sent notifications to users with the updated terms and user agreements.

Sample Notification from UPI Apps

Subject: Important UPI Changes Effective August 1, 2025

Dear User, per new NPCI guidelines, your UPI experience is getting updated:

• Autopay will now happen between 4–8 AM
• You must complete KYC for Lite wallets
• Refunds will now be faster (within 24 hours)

Please ensure your profile and authentication settings are up to date. Thank you for using XYZ UPI App.

What Experts Say

“These reforms will greatly enhance the trust factor in digital payments. By limiting autopay timings and mandating dynamic QR codes, NPCI is closing important security gaps.”

— Ramesh Joshi, Fintech Analyst at PayBiz Insights

“The shift to biometric and 2FA for high-value UPI sends is a much-needed move to tackle rising cyber threats.”

— Aditi G., Cybersecurity Consultant

What’s Coming Next in UPI (2025-2026)?

• Voice-based UPI payments in Hindi & regional languages
• UPI-CBDC (Digital Rupee) integration under pilot testing
• UPI Global QR for international shopping
• Unified Merchant Dashboard for small vendors

Penalties for Violation

• UPI apps failing to comply may face:
  • Penalty up to ₹1 crore from RBI
  • API suspension from NPCI
• Merchants using static or expired QR codes post-March 2026 will be blacklisted from UPI-enabled platforms

Final Thoughts: Be UPI Ready

These UPI changes effective from August 1, 2025, are all about strengthening the foundation of India’s most preferred payment mode. Users should update their apps, verify credentials, enable authentication, and complete KYC wherever needed.

✉️ Stay informed, stay secure — and enjoy hassle-free digital transactions.