Demystifying the NPCI Buzz
The National Payments Corporation of India, or NPCI, is the organisation behind the Unified Payments Interface (UPI) that has transformed how we pay for everything. From your morning coffee to your monthly rent, UPI has made transactions seamless. Because
it governs this vast ecosystem, any new rule or circular it issues can have a ripple effect. Recently, a series of guidelines have been introduced that, while not aimed specifically at travel, are directly impacting how holidaymakers plan and pay for their trips, both within India and abroad.
The New UPI Limits for Travel
One of the most significant changes for domestic travellers is the adjustment of UPI transaction limits. Previously, a single payment cap of ₹1 lakh often forced users to split large payments for flights and hotels, creating unnecessary hassle. Recognising this, NPCI has increased the per-transaction limit for specific categories, including travel. For verified merchants in the travel sector, the UPI transaction limit has been raised to ₹5 lakh per transaction, with a daily cumulative limit of up to ₹10 lakh. This is a huge relief for those booking family vacations or luxury stays, as it eliminates the need to break down payments. However, it is crucial that the travel agent or booking portal is a verified merchant under the correct category code to avail this higher limit.
Watch Out for Wallet Charges
While direct bank-to-bank UPI transactions remain free for customers, a subtle change has occurred with payments made via prepaid wallets. NPCI has introduced an interchange fee of up to 1.1% on UPI transactions over ₹2,000 made through Prepaid Payment Instruments (PPIs), which include most digital wallets. While NPCI has clarified that this charge is not meant for customers to pay directly, it is a cost borne by merchants. This could subtly influence payment options offered by some travel portals or, in rare cases, be passed on. For large holiday-related expenses, it is a good practice to use direct bank-to-bank UPI transfers or other methods like credit cards to avoid any potential complexities arising from these interchange fees.
Taking UPI Abroad: What to Know
Perhaps the most exciting development is the global expansion of UPI. Indian travellers can now use their familiar UPI apps to pay at merchants in several countries, including Singapore, the UAE, France, and Sri Lanka. This system allows you to scan a local QR code, and the payment is debited from your Indian bank account in rupees after a real-time currency conversion. To use this feature, you must first activate "International Payments" in your UPI app settings before you travel. It’s also important to note a key security update from NPCI: international payments made by scanning a QR code saved in your phone's gallery are no longer permitted. You must perform a live scan of the physical QR code at the merchant's location, a move designed to curb fraud.
Your New Pre-Travel Payment Checklist
So, how do you navigate this new landscape? First, for large domestic bookings, confirm with your travel provider if they are a verified merchant eligible for the higher ₹5 lakh UPI limit. If not, be prepared to use NEFT, RTGS, or a credit card. Second, when paying with a wallet, be mindful of the ₹2,000 threshold for potential interchange fees and prefer bank-to-bank UPI. Third, if travelling abroad, activate international UPI on your app before you leave India and remember that only live QR code scanning works. Always carry a backup, like a credit or forex card, as international UPI is still expanding and not all merchants in a supported country may accept it.
