UPI charges explained: What changes for payments above ₹2,000?
What's the story
The Indian government has said that no charges will be levied on Unified Payments Interface (UPI) transactions of up to ₹2,000. The Ministry of Finance issued a gazette notification on Monday under the Payment and Settlement Systems Act, 2007. It specifically mentions that banks and payment system providers cannot charge fees for these electronic payment modes.
Payment categories
Definition of electronic payment modes
The government has defined two categories of electronic payments under the Payment and Settlement Systems Act: RuPay-powered debit card transactions and UPI payments up to ₹2,000.
For these transactions, banks and payment system providers cannot impose charges on customers directly or indirectly.
This move is in line with the Finance Ministry's earlier assurance that consumers would not have to pay transaction charges for making UPI payments.
MDR introduction
Will UPI payments above ₹2,000 be charged?
The finance ministry's new gazette notification does not charge consumers for UPI payments over ₹2,000.
It simply establishes the legal framework under amended payment laws to allow future merchant-side charges on higher-value transactions.
Government officials had previously hinted that any future merchant fee would be small, likely between 0.25% and 0.4%, and apply only to payments above a certain amount.
For now, UPI remains completely free, regardless of whether the payment is below or above ₹2,000.