Which Payment Gateway is Best for India Business?

Following the NPCI regulations that came into effect on September 15, 2025, your POS system must validate insurance premium UPI payments by checking both per-transaction and cumulative daily limits for the specific merchant category. This is distinct from the lower, standard UPI limits.

Start by tracking cumulative UPI transaction volume per store per day in your payment service or ERP. Every time a UPI payment is processed, log the transaction amount along with the merchant VPA, date, and category. Then, have a daily counter that resets at midnight (or whenever NPCI’s cycle resets).
Next, define category-wise cap thresholds in your config, for example, ₹10L for verified merchants in approved categories and ₹2L for everyone else. Then, set trigger points like 80%, 90%, and 100% of the limit.
At the 80% mark, you can send a soft warning via Slack, email, or dashboard alert, something like:
Heads up! Store #45 has reached 80% of its ₹10L UPI cap for today (₹8L processed). Monitor closely to avoid declines.
At 90%+, escalate it as a high-priority alert, possibly tagged to both finance and store managers so they can proactively switch to alternate payment modes (like netbanking or card) before UPI declines start.
To make this real-time, plug it into your payment processing middleware or gateway webhooks. Each successful transaction updates the cumulative total immediately, no waiting for end-of-day reports.
If you want to get fancy, you can integrate a visual dashboard showing daily cap usage as a progress bar per store. Many finance teams do this in Metabase or Grafana, it’s an easy way to see which merchants are nearing their limits at a glance.
Finally, make sure your alert system includes category validation logic. You don’t want to alert a store using a ₹2L cap if it’s actually verified for ₹10L. So sync your merchant category and verification status daily with your PSP or NPCI data source.

Ride-hailing apps can simplify split fares using UPI by leveraging the new, higher daily aggregate limits for split payments and offering a streamlined user experience. They can enable users to pay their share of a fare directly through a single, higher-value split payment, rather than making multiple smaller transactions. The app can also streamline the process by automatically calculating and suggesting the split amount for each user's UPI payment, making the process faster and simpler.

You must work with your bank for merchant verification and interface with a payment gateway that supports the most recent UPI APIs in order to demonstrate real-time eligibility for larger UPI limits.  The higher limit choice can then be dynamically displayed at your e-commerce checkout for purchases in qualified categories like travel, investments, or insurance.

When QA tests UPI refunds and reversals under the new high-limit rules, they should focus on four main buckets: correctness, compliance, concurrency, and reconciliation.
Core refund/reversal validations

• Full refund success – Initiate a refund equal to the original transaction amount (even if >₹2L) and verify it posts successfully for verified merchants.
• Partial refund success – Validate that multiple partial refunds against the same UPI Ref ID are allowed and reconcile correctly.
• Refund cap breach – Try refunding more than the original amount or beyond daily refund limits to ensure proper error (LIMIT_EXCEEDED or PSP-defined).
• Reversal after auto-refund – Simulate double credit scenarios where your system mistakenly retries a refund and confirm idempotency prevents duplicates.

Timing and window edge cases

• Refund outside allowed window – Test refunds initiated after NPCI’s refund cut-off (typically T+1/T+2) to confirm they’re rejected gracefully.
• High-value reversal delay – Validate how long large reversals take to reflect in settlement files; your ERP should still mark them “pending reversal” until confirmation.
• Refund retry under PSP timeout – Simulate PSP latency during peak hours to verify your retry/backoff logic (especially for ₹5L+ refunds).

Concurrency and split-payment scenarios

• Split invoice refund – If the original payment was split into multiple UPI legs, ensure refund logic correctly targets each UPI Ref ID and matches proportionally.
• Concurrent refunds – Two refund requests fired at once for the same transaction should trigger one success and one duplicate rejection.
• Daily limit overlap – Simulate when a merchant is close to their ₹10L daily limit and issues a refund that would push them past it — should fail or queue per PSP policy.

Reconciliation and ledger checks

• Refund reflected in PSP file – Make sure every refund entry appears in NPCI or PSP settlement files and matches your ledger.
• Customer advance vs. revenue correction – Test accounting mappings: refund on advance should reverse liability, refund on sale should reverse revenue.
• Mismatch alerting – Simulate a failed refund that PSP reports as success (or vice versa) and ensure your reconciliation job flags the mismatch automatically.