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UPI transactions up to ?2,000 to remain completely free; new government notification—who pays charges for higher amounts?
The Central Government issued a significant notification on Monday. According to it, transactions up to ?2,000 made via the Unified Payments Interface (UPI) and payments made using RuPay debit cards will remain completely free of charges. Banks or payment system providers will not be permitted to levy any direct or indirect charges on these transactions.
The Ministry of Finance issued this notification under Section 10A of the Payment and Settlement Systems Act, 2007. It explicitly states:
“(i) RuPay-powered debit cards; and
(ii) Unified Payments Interface (UPI) transactions up to ?2,000…
No bank or system provider shall impose any direct or indirect charge on a person making or accepting payments using these electronic payment methods.”
What changes for the average consumer?
UPI transactions up to ?2,000 (person-to-person or merchant) will remain completely free.
Transactions using RuPay debit cards will also be free of charges.
Generally, about 96 percent of UPI transactions fall within this limit. This means the majority of daily small and large purchases will benefit from this.
What happens if transactions exceed ?2,000?
The notification makes no mention of levying charges on transactions exceeding ?2,000. This implies that such transactions currently continue to be free. However, this has paved the way for the potential application of a nominal Merchant Discount Rate (MDR) on select merchant transactions in the future.
The government has already clarified that:
No charges will be levied on general consumers.
Person-to-person (P2P) transactions will always remain free. If any charges are applied, they will have to be borne solely by the merchants.
The objective behind these changes is to make the digital payments ecosystem sustainable and competitive. Given the massive growth of UPI, the industry had been calling for such measures to maintain the underlying infrastructure.
In short:
All UPI transactions and RuPay card payments up to ?2,000 are now legally protected. Ordinary users will not have to pay any additional charges at this time. Decisions regarding high-value merchant transactions will be taken by the NPCI and relevant authorities.
The Central Government issued a significant notification on Monday. According to it, transactions up to ?2,000 made via the Unified Payments Interface (UPI) and payments made using RuPay debit cards will remain completely free of charges. Banks or payment system providers will not be permitted to levy any direct or indirect charges on these transactions.
The Ministry of Finance issued this notification under Section 10A of the Payment and Settlement Systems Act, 2007. It explicitly states:
“(i) RuPay-powered debit cards; and
(ii) Unified Payments Interface (UPI) transactions up to ?2,000…
No bank or system provider shall impose any direct or indirect charge on a person making or accepting payments using these electronic payment methods.”
What changes for the average consumer?
UPI transactions up to ?2,000 (person-to-person or merchant) will remain completely free.
Transactions using RuPay debit cards will also be free of charges.
Generally, about 96 percent of UPI transactions fall within this limit. This means the majority of daily small and large purchases will benefit from this.
What happens if transactions exceed ?2,000?
The notification makes no mention of levying charges on transactions exceeding ?2,000. This implies that such transactions currently continue to be free. However, this has paved the way for the potential application of a nominal Merchant Discount Rate (MDR) on select merchant transactions in the future.
The government has already clarified that:
No charges will be levied on general consumers.
Person-to-person (P2P) transactions will always remain free. If any charges are applied, they will have to be borne solely by the merchants.
The objective behind these changes is to make the digital payments ecosystem sustainable and competitive. Given the massive growth of UPI, the industry had been calling for such measures to maintain the underlying infrastructure.
In short:
All UPI transactions and RuPay card payments up to ?2,000 are now legally protected. Ordinary users will not have to pay any additional charges at this time. Decisions regarding high-value merchant transactions will be taken by the NPCI and relevant authorities.
The Ministry of Finance issued this notification under Section 10A of the Payment and Settlement Systems Act, 2007. It explicitly states:
“(i) RuPay-powered debit cards; and
(ii) Unified Payments Interface (UPI) transactions up to ?2,000…
No bank or system provider shall impose any direct or indirect charge on a person making or accepting payments using these electronic payment methods.”
What changes for the average consumer?
UPI transactions up to ?2,000 (person-to-person or merchant) will remain completely free.
Transactions using RuPay debit cards will also be free of charges.
Generally, about 96 percent of UPI transactions fall within this limit. This means the majority of daily small and large purchases will benefit from this.
What happens if transactions exceed ?2,000?
The notification makes no mention of levying charges on transactions exceeding ?2,000. This implies that such transactions currently continue to be free. However, this has paved the way for the potential application of a nominal Merchant Discount Rate (MDR) on select merchant transactions in the future.
The government has already clarified that:
No charges will be levied on general consumers.
Person-to-person (P2P) transactions will always remain free. If any charges are applied, they will have to be borne solely by the merchants.
The objective behind these changes is to make the digital payments ecosystem sustainable and competitive. Given the massive growth of UPI, the industry had been calling for such measures to maintain the underlying infrastructure.
In short:
All UPI transactions and RuPay card payments up to ?2,000 are now legally protected. Ordinary users will not have to pay any additional charges at this time. Decisions regarding high-value merchant transactions will be taken by the NPCI and relevant authorities.
