National Payments Corporation of India (NPCI) has introduced a new merchant category code (MCC) framework for UPI gift cards while capping individual transactions at Rs. 10,000, according to industry sources.
The move is aimed at creating a distinct classification for gift card-related transactions within the UPI ecosystem while strengthening transaction monitoring and operational controls.
Under the revised framework, UPI gift card transactions will now operate under a dedicated MCC structure, enabling banks and payment ecosystem participants to better identify and process such transactions separately from regular merchant payments.
Sources familiar with the development stated that the transaction cap of Rs. 10,000 per payment has been introduced as part of risk management and compliance measures associated with prepaid and gift card-linked UPI transactions.
The new guidelines are expected to impact fintech companies, prepaid payment instrument providers, and merchants offering gift card-based payment solutions through UPI platforms.
Industry participants believe the dedicated MCC structure could improve transparency and help payment ecosystem stakeholders track usage patterns, monitor fraud risks, and streamline reconciliation processes more effectively.
The development comes as UPI continues to witness rapid growth across consumer and merchant payments, with prepaid instruments and gift card-linked payment models increasingly becoming part of digital transaction ecosystems.
National Payments Corporation of India has been steadily introducing operational and compliance-focused updates across the UPI infrastructure to strengthen security, standardisation, and transaction efficiency within India’s digital payments ecosystem.
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