New UPI Rules Effective 1 August 2025

New UPI Rules Effective 1 August 2025

Why in News? 

New UPI rules started applying from August 1, 2025. These changes are introduced by NPCI to improve how UPI apps work and make digital payments safer for users. This step reflects the growing focus on secure and smooth transactions.

• These updated rules apply to all Unified Payments Interface (UPI) service providers, such as PhonePe, Google Pay, and Paytm.

New UPI Rules Effective 1 August 2025: Key Changes 

• Daily Limit on Balance Enquiry: As per the revised guidelines, users can check their bank account balance only up to 50 times per day through any UPI app. This limit has been introduced to reduce unnecessary load on the UPI servers, especially during peak transaction periods. UPI apps will now also have the authority to restrict balance check requests temporarily to manage traffic better. 
• Bank Account Visibility Restrictions: To improve data privacy and prevent unnecessary bank access, users will be allowed to view their bank account details only 25 times in a day. UPI apps will now prompt users to manually choose their bank before retrieving any such detail. 
• Regulated Auto Payment Processing: NPCI has made changes to how auto-debit mandates work. To avoid server overload during busy periods, auto payment processing will now only occur during non-peak hours. The permitted time windows are before 10:00 am, between 1:00 pm to 5:00 pm, and after 9:30 pm. For instance, if a scheduled auto-payment was set for 11:00 am, it might now be processed slightly earlier or later depending on server load. If a payment fails at first, users will get retry chances before the system cancels it.
• Verified Recipient Name Before Transactions: To prevent money from being mistakenly sent to the wrong person, UPI apps will now display the recipient’s registered name before a transaction is completed. This name will be shown alongside the transaction ID to help users verify the identity of the recipient before authorizing any fund transfer. 
• Payment Status Update Improvements: The new rules ensure that such pending transactions will be updated within a few seconds instead of remaining unconfirmed for extended periods. Users can now view payment status only three times with at least 90 seconds between each try.

Why do these UPI Rule Changes Matter?

• Massive Growth in Recent Years: UPI has become the most preferred method for digital payments in India. According to NPCI data, UPI recorded over 18.4 billion transactions in June 2025 alone. This massive growth has created pressure on the system. These new rules will help manage that load and make the system work more smoothly for everyone. 

• More Protection from Fraud: Digital scams have become a major concern for users. Many people have accidentally sent money to the wrong account or fallen into fraud traps. The new rule that shows the recipient’s full name before payment will help stop such errors. It will give users a chance to verify who they are paying. 

• No More Payment Delays: Peak hours often lead to failed or delayed payments. People face issues like money getting deducted but not reaching the receiver. The new rules now limit certain actions during busy hours. This will ease pressure on servers and reduce delays in transactions.

• Better Transparency in Payment Status: Earlier, pending payments stayed in limbo for too long. Now, users will get payment updates within seconds. They can also check the status only three times, with a fixed gap in between. This will stop users from overloading the system and ensure faster processing of each transaction.

What is UPI (Unified Payments Interface)?

• About: Unified Payments Interface (UPI) is a real-time payment system that allows users to send and receive money instantly using a mobile device. The system connects multiple bank accounts into a single app, giving users the ability to make payments without needing to know the receiver’s bank account number or IFSC code. UPI allows fund transfers using just a mobile number, UPI ID, or QR code, making it very user-friendly.

• History: The journey of UPI started with the vision of creating a seamless digital payment structure in India. NPCI developed UPI as a part of its Digital India initiative. NPCI introduced UPI in April 2016 with the support of RBI and IBA. Soon, apps like BHIM, PhonePe, and Google Pay adopted the system and brought it to the masses.

Features of UPI (Unified Payments Interface)

• Real-time Transactions: UPI supports direct bank-to-bank transfers in real-time. The system works 24 hours a day, including weekends and holidays.
• Single Mobile Application: Users can link multiple bank accounts through one UPI-enabled app. This reduces the need to switch between different banking apps.
• Virtual Payment Address (VPA): Each user can create a unique UPI ID (like name@bank), which replaces the need to share personal bank details.
• Two-Factor Authentication: UPI follows RBI’s two-factor authentication guidelines. Users need a mobile PIN (MPIN) and must complete device verification to secure transactions.
• Support for Recurring Payments: UPI supports features like AutoPay, allowing users to schedule payments for bills, subscriptions, and EMIs.
• Interoperability: UPI works across all major banks and payment service providers in India. A user on PhonePe can send money to someone using Paytm without any extra steps.

Significance of UPI (Unified Payments Interface)

• Boost to Financial Inclusion: UPI gave banking access to millions of people who earlier depended only on cash. Even people without smartphones can use UPI with feature phones via the UPI123Pay system introduced in March 2022.
• Promotes Cashless Economy: UPI has been a major step in India’s move towards a less-cash economy. It supports the goals of the Digital India initiative, helping India become a digitally empowered society.
• Reduces Dependence on Cash and Cards: Users no longer need to carry wallets or cards for everyday purchases. UPI enables payments for groceries, cab rides, online shopping, and even government services.
• Trusted by the Public: The high level of security and the backing of RBI and NPCI have made UPI a trusted payment platform. Millions of users rely on it daily for personal and business needs.
• Enabler of the Gig Economy: Freelancers, small business owners, and content creators use UPI to receive instant payments from clients and customers. It supports entrepreneurship and digital commerce.

Achievements of UPI (Unified Payments Interface)

• Rapid Growth in Volume: In less than a decade, UPI has become one of the world’s most-used real-time payment systems. According to NPCI data, UPI processed 18.4 billion transactions in June 2025, amounting to ₹18.2 lakh crore.
• Global Recognition: Several countries have recognized UPI’s success. In 2023, India made deals with Singapore, UAE, and France for international UPI transactions. These deals allow Indian travelers to use UPI abroad and receive funds easily from global partners.
• Leading Fintech Ecosystem: UPI has become the backbone of India’s growing fintech industry. Apps like PhonePe, Google Pay, Paytm, Amazon Pay, and BharatPe use UPI to offer fast, secure payment options to millions of users.
• Reduced Cost of Transactions: Unlike card payments, UPI offers low-cost transaction processing for merchants. Many small businesses prefer UPI because it avoids the high fees charged by card companies.

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