The government has clarified that UPI payments of up to Rs 2,000 will continue to remain free of charges. Banks and payment service providers will not be allowed to impose any direct or indirect fee on these transactions.
The rule also covers payments made through RuPay debit cards, meaning users making eligible payments through UPI or RuPay debit cards will not have to pay additional transaction charges.
The government issued the notification under Section 10A of the Payment and Settlement Systems Act, 2007.
No Charges on UPI Payments Up to Rs 2,000
According to the Finance Ministry, the government has specified two electronic payment methods under the provision — RuPay-powered debit cards and UPI transactions of up to Rs 2,000.
Under the notification, banks and payment system providers cannot directly or indirectly charge people for making or receiving payments through these specified payment methods.
The move provides clarity for millions of people and businesses that use UPI for everyday digital payments.
What About UPI Transactions Above Rs 2,000?
While UPI transactions up to Rs 2,000 will remain free, the notification could open the door for a nominal Merchant Discount Rate (MDR) on certain merchant UPI payments above a specified limit.
However, consumers and person-to-person (P2P) UPI transactions are expected to remain free. The government had earlier indicated that if any fee is introduced, it would be paid by merchants rather than customers.
This means regular users are not expected to pay a fee for sending money to another person through UPI.
Government Explains Reason Behind UPI Changes
The government said the proposed changes are part of its wider plan to make India’s digital payment system more sustainable and competitive.
With digital payments growing rapidly across the country, the government wants the payment ecosystem to have the infrastructure needed to support India’s expanding digital economy.
The Finance Ministry also rejected reports suggesting that external pressure had influenced the proposed policy changes. It described such claims as “unfounded, completely false and misleading.”
UPI Transactions Continue to Grow in India
UPI has become one of the most widely used digital payment methods in India since its launch around a decade ago.
In August, UPI processed 24.51 billion transactions worth Rs 29.82 trillion, highlighting the massive scale of digital payments in the country.
Google Pay and Walmart-owned PhonePe together accounted for roughly three-fourths of the total UPI transaction volume during the month.
What UPI Users Should Know
For users, the key point is simple — UPI transactions of up to Rs 2,000 will remain free of charges under the government’s notification.
RuPay debit card payments covered by the notification will also remain free from charges imposed by banks or payment system providers.
Any possible future charge is expected to focus on selected merchant transactions above the specified threshold rather than regular person-to-person UPI payments.
