In 2026, UPI is no longer just for small payments. For certain businesses, the UPI merchant limit of ₹10 lakh has changed how high-value transactions are handled. Many users, however, remain unaware that this higher limit exists only for verified merchant categories, not for all shopkeepers or online sellers.
This gap in understanding often leads to confusion when a large payment fails, even though both buyer and seller assume UPI should handle it. Knowing who qualifies for the ₹10 lakh merchant limit and what users must verify before paying prevents last-minute disruptions.
What Is the UPI Merchant ₹10 Lakh Limit
The ₹10 lakh limit applies to P2M (person-to-merchant) transactions for select, regulated categories. It is designed for sectors where large digital payments are common and traceability is important.
This is not a default upgrade. Merchants must meet eligibility criteria and be correctly classified within the UPI ecosystem to accept payments at this level.
Eligible Merchant Categories for ₹10 Lakh Limit
| Merchant Category | Eligibility Status |
|---|---|
| Large Hospitals | Eligible (verified only) |
| Educational Institutions | Eligible (approved setup) |
| Government Services | Eligible |
| Registered Utilities | Eligible (select cases) |
| General Retail Shops | Not eligible |
If a merchant is not mapped under an approved category, the standard limits apply regardless of transaction size.
Why Payments Fail Despite High Limits
A common assumption is that any business with a QR code can accept large UPI payments. That assumption is incorrect. Payment failures usually occur because the merchant’s category is not verified for higher limits.
Another reason is partial limit exhaustion. If the user has already used a portion of their daily cap, the remaining balance may be insufficient for the intended payment.
What Users Must Verify Before Paying
Before initiating a high-value UPI payment, users should confirm the merchant’s eligibility. This includes checking whether the merchant is officially recognised under a high-limit category and whether the payment purpose matches that classification.
| Verification Step | Why It Matters |
|---|---|
| Merchant category | Determines limit eligibility |
| Payment purpose | Must match approved use |
| Daily usage status | Avoids aggregate cap issues |
| Timing of payment | Early payments reduce failures |
Skipping these checks often results in declined transactions.
How Merchants Enable the ₹10 Lakh Limit
Merchants must complete additional onboarding steps with their acquiring bank or payment service provider. This includes category verification, documentation submission, and backend configuration.
Merchants who fail to complete this process remain capped at lower limits, even if their business type should qualify.
What Has Not Changed for Users
Despite higher merchant limits, user-side authentication remains the same. There are no extra charges, no additional PIN steps, and no change in dispute or refund processes.
Understanding this reassures users who worry that higher-value UPI payments might carry added risk.
When Not to Use UPI for Large Payments
For non-eligible merchants or informal transactions, UPI may not be the right tool for very large payments. In such cases, traditional banking channels offer more predictability.
Choosing the right payment method reduces frustration for both parties.
Conclusion
The UPI merchant limit of ₹10 lakh is a powerful feature, but only when used correctly. It applies strictly to verified categories and properly onboarded merchants. Users who verify eligibility before paying enjoy seamless high-value transactions, while those who assume all merchants qualify often face avoidable payment failures.
FAQs
What is the UPI merchant limit in 2026?
Eligible merchants can accept up to ₹10 lakh per transaction.
Does every merchant get the ₹10 lakh limit?
No, only verified and approved categories qualify.
Why did my large UPI payment fail?
Likely due to merchant category mismatch or exhausted daily limit.
Are there extra charges for high-value UPI payments?
No, UPI remains free for users.
Can merchants upgrade their limit anytime?
Yes, but only after proper verification and onboarding.
Click here to know more.