New Delhi, Sept 2026 : The government on Monday clarified that banks and payment system providers cannot impose any charges on Unified Payments Interface (UPI) transactions of up to Rs 2,000, providing greater clarity on the rules governing digital payments in the country.
The Finance Ministry, through a gazette notification issued under the Payment and Settlement Systems Act, 2007, specified UPI transactions of up to Rs 2,000 and RuPay-powered debit card payments as electronic modes of payment on which no charges can be levied.
“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,” the notification said.
It further stated that no bank or system provider shall impose any charge, either directly or indirectly, on a person making or receiving a payment through the specified electronic modes.
The government’s move seeks to establish clear rules on charges for digital transactions and reinforce the existing framework supporting low-cost and accessible digital payments.
The notification specifically identifies RuPay-powered debit cards and UPI transactions up to the Rs 2,000 threshold as protected electronic payment modes. This means users making or receiving eligible payments cannot be charged by banks or payment system providers for such transactions.
The clarification follows a broader debate over amendments to the Payment and Settlement Systems Act, 2007, with concerns emerging that changes to the law could eventually result in charges being imposed on UPI users.
Last month, the Finance Ministry had clarified that consumers would not be charged for making payments through UPI. It also said that any merchant discount rate (MDR) introduced in the future would apply only to a limited category of merchant transactions above a specified threshold.
“All person-to-person (P2P) UPI transactions will continue to remain free and there will be no blanket MDR on merchants,” the ministry had said.
The government further clarified that, if introduced, MDR would apply only to selected merchant transactions above a certain value and would be charged at a nominal rate.
According to the Finance Ministry, any such MDR would also be significantly lower than the rates applicable to debit and credit card transactions.
UPI has become one of India’s most widely used digital payment systems, enabling instant bank-to-bank transfers through mobile applications. The government has repeatedly promoted UPI as part of its broader digital payments and financial inclusion initiatives.
The latest notification is expected to provide additional certainty to consumers and businesses by clearly establishing that eligible UPI transactions up to Rs 2,000 and RuPay-powered debit card payments cannot attract direct or indirect charges from banks or payment system providers.
(Disclaimer :The content of this article is sourced from a news agency and has not been edited by the Mavericknews30 team.)
