Banks Cannot Impose Charges on UPI Payments of up to Rs 2,000, Govt Says
Consumers will still pay no extra fee, while merchants face a 0.4% charge on eligible UPI payments above Rs 2,000.
- On Monday, the Union Finance Ministry issued a notification barring banks from charging on UPI and RuPay debit card transactions up to Rs 2,000, while introducing a 0.4% Merchant Discount Rate for person-to-merchant payments exceeding Rs 2,000 effective October 15, 2026.
- The National Payments Corporation of India estimated annual network operating costs at about Rs 20,000 crore, prompting regulators to end the zero-fee regime maintained since 2020 to ensure long-term investment in digital infrastructure and cybersecurity.
- Small vendors receiving up to Rs 1 lakh monthly remain exempt, as do all person-to-person transfers, while a 0.4% rate applies to larger merchant payments with a Rs 300 cap for transactions worth Rs 75,000 or more.
- Congress leader Rahul Gandhi alleged the government is 'surrendering' to American pressure by imposing fees, while Finance Minister Nirmala Sitharaman maintained the Merchant Discount Rate applies solely to merchants and banks must prevent costs from being passed to consumers.
- Essential sectors including fuel and railways will face a flat Rs 5 charge for payments above Rs 2,000, while 5% of total MDR collections will fund small-merchant adoption in underserved markets, balancing revenue generation with affordability.
114 Articles
114 Articles
Zero charges on person-to-person transactions: New UPI rules keep all P2P payments 100% free regardless of amount
NEW DELHI: In a major policy announcement aimed at safeguarding everyday digital transactions, the government has clarified that all Person-to-Person (P2P) UPI transfers will remain entirely free of charges, without any restrictions on payment amounts, according to the Ministry of Finance press release. Under a newly structured framework introduced under the Payment and Settlement Systems Act, 2007, approximately 96 per cent of Person-to-Merchan…
Centre introduces 0.4% MDR on UPI payments above ₹2,000 made to merchants
From October 15, a 0.4% merchant discount rate applies to UPI person-to-merchant payments over 2,000, with consumers unaffected; person-to-person.UPI charges, merchant discount rate, UPI payment changes, new UPI fees, digital payment updates, person-to-merchant payments, finance ministry UPI, NPCI transaction fees, UPI infrastructure investment, digital investing costs, essential sector payments, utility bill payments UPI, educational fee paymen…
‘No tax on UPI consumers’, Finance Ministry says only 0.4% MDR to be levied on payments to merchants up to ₹2,000; NPCI issues FAQ sheet
Amid speculation, the Ministry of Finance announced on 15th September that there will be no charges on person-to-person Unified Payments Interface (UPI) transactions. The National Payments Corporation of India confirmed that only nominal 0.4% charges will be levied on payments to merchants (P2M) transactions above ₹2,000. The revised UPI Merchant Discount Rate (MDR) will come into effect from 15th October 2026. 0.4% MDR on P2M UPI transactions “…
Coverage Details
Bias Distribution
- 57% of the sources lean Right
Factuality
To view factuality data please Upgrade to Premium
