New Delhi, Sept 14 (NVI) The government has clarified that banks and payment system providers cannot levy direct or indirect charges on UPI transactions of up to Rs 2,000, providing greater certainty over the cost of small-value digital payments.
The clarification comes after amendments to the Payment and Settlement Systems Act, 2007, had raised concerns that UPI transactions could eventually attract charges.
The government has maintained that consumers will not be charged for using UPI, while any future merchant discount rate (MDR) would be restricted to a limited set of merchant transactions above a prescribed threshold.
Person-to-person payments will continue to remain free, while the government has said the vast majority of merchant transactions will also remain free of charge. Any future MDR would be nominal and apply only to specified merchant transactions.
The clarification also covers payments made through RuPay-powered debit cards, under the government’s broader framework for supporting digital payments.
The government has said the legislative changes are intended to provide an enabling framework for the long-term sustainability of UPI, while supporting financial inclusion, technological development, cybersecurity and resilience against emerging risks.
The move comes as UPI continues to expand rapidly across India’s digital payments ecosystem.
UPI processed 2,366 crore transactions worth Rs 29.9 lakh crore in July 2026, according to the Finance Ministry.
For consumers, the key takeaway is that UPI payments up to Rs 2,000 remain free, while any future charges on higher-value merchant transactions would depend on separate decisions and notifications under the revised framework. (NVI)
