UPI payments up to Rs 2,000 to remain free of bank charges

New Delhi: The government has clarified that banks cannot impose any direct or indirect charges on Unified Payments Interface (UPI) transactions of up to Rs 2,000, providing assurance to users amid concerns over possible charges on digital payments.

According to a government gazette notification, the same exemption applies to payments of up to Rs 2,000 made through RuPay-powered debit cards. No bank or system provider can levy any charge on a person making or receiving payments through these electronic modes.

The Finance Ministry notified the changes under the Payment and Settlement Systems Act to provide clarity on the rules governing charges on UPI transactions. The notification specifically categorised RuPay-powered debit cards and UPI transactions of up to Rs 2,000 as “electronic modes of payment”.

The clarification follows the government’s statement last month that consumers would not be charged for making payments through UPI. It had also said that any future merchant discount rate (MDR) would apply only to select transactions above a specified threshold.

The Ministry said all person-to-person (P2P) UPI transactions would continue to remain free and there would be no blanket MDR on merchants. It added that any such charges would be significantly lower than those applicable to debit or credit card transactions.

The clarification came amid a debate over a recent amendment to the Payment and Settlement Systems Act, 2007, which had triggered concerns over the possibility of charges being imposed on UPI users. (Agencies)