New Delhi, August 1, 2025 — India’s Unified Payments Interface (UPI) is rolling out stricter security norms and transaction limits today. The updates aim to enhance safety amid rising fraud, protect customer trust, and balance convenience with control.
What’s Changing from August 1
- Two-Step Authentication: For transactions above ₹5,000, users must authenticate both via app OTP and a secondary validation—either a fingerprint, PIN, or face recognition.
- Monthly Non-KYC Limits: Users without full KYC will have a reduced monthly transaction limit of ₹1 lakh (down from ₹2 lakh).
- New Daily Withdrawal Cap: Maximum daily transfer limit per app is capped at ₹1 lakh for linked bank accounts.
- Refund Timelines: Platforms must process refunds within 24 hours of stoppage; holding refunds beyond 48 hours can trigger fines.
- NPCI Regulations on Merchant Onboarding: Merchant UPI IDs must link directly to verified business accounts; personal accounts are being phased out.
Why It Matters
As UPI scales beyond 10 billion transactions a month, these changes strike a balance between growth and governance. For fintech and SaaS founders, it’s a reminder: ease of payment must not compromise risk management.
Encryption, fraud detection, liability clauses, and customer complaint redressals are now central not optional.
Implications for Founders
- Fintech startups must upgrade onboarding flows and enhance backend security layers to meet two-factor prompts without hurting UX.
- Merchant-facing platforms & aggregators should transition partners to business-verified UPI IDs before the cutoff date to avoid disruption.
- Subscription-based platforms (D2C, SaaS, edtech) should prepare for payment failures due to stronger limits and remind customers to complete KYC early.
Final Take
UPI is evolving faster than ever. Founders must treat it not just as a payment rail but a product compliance layer. Building with trust, not just bravado, is what ensures customer loyalty and regulatory resilience.
Follow StartupByDoc.com for more updates and founder playbooks on building compliant fintech and digital-payment products.