No charges to be levied on UPI payments up to Rs 2,000, says government
PTC News Desk: The Central government has clarified that banks cannot charge customers for UPI transactions of up to ₹2,000 or for payments made using RuPay-powered debit cards.
A government notification issued by the Finance Ministry has classified RuPay debit card payments and UPI transactions up to ₹2,000 as electronic modes of payment. It states that banks and payment system providers cannot impose any direct or indirect charges on people making or receiving payments through these methods.
The clarification has been issued under the Payment and Settlement Systems Act, 2007, to set out the rules regarding charges on such digital payments.
"In exercise of the powers conferred by section 10 A of the Payment and Settlement Systems Act, 2007 (51 of 2007), the Central Government hereby specifies the following electronic modes of payment, namely:– (i) Debit Card powered by RuPay; and (ii) Unified Payments Interface (UPI) transactions upto Rs. 2,000. No bank or system provider shall impose, whether directly or indirectly, any charge upon a person making or receiving a payment by using the electronic modes of payment specified in paragraph above," the Finance Ministry said in an official notification.
Under Section 10A of the Act, banks and system providers are prohibited from charging users for RuPay debit card transactions and UPI payments of up to ₹2,000.
The move comes after the government recently indicated that it could allow a small Merchant Discount Rate (MDR) on certain UPI merchant transactions above a specified limit. However, consumers and person-to-person UPI payments are expected to remain free.
The government said the proposed changes are part of efforts to make India’s digital payment system more sustainable and competitive while supporting the country’s growing digital economy.
Finance Minister Nirmala Sitharaman had earlier clarified that MDR applies to merchants, not customers. She said such charges would help banks and fintech companies invest in digital payment infrastructure and security.
- PTC NEWS
