If you use UPI regularly for everyday payments, there is no new charge on transactions of up to ₹2,000 under the latest government order.

The Central government has prohibited banks and system providers from directly or indirectly charging people who make or receive payments through UPI transactions up to ₹2,000. The same order also covers payments made using RuPay-powered debit cards, according to the Ministry of Finance.

The decision means that routine UPI payments within the ₹2,000 limit continue to remain free for users.

Will UPI charges be introduced?

The issue of UPI charges has gained attention after the government said in August that it could consider introducing a nominal Merchant Discount Rate (MDR) on a limited category of UPI merchant transactions above a specified threshold.

However, the proposed change does not mean that consumers will start paying a charge every time they use UPI.

The government has maintained that person-to-person UPI payments will remain free, while any potential MDR would apply only to a limited set of merchant transactions above a certain threshold.

What is MDR and who could it affect?

Merchant Discount Rate, or MDR, is a charge associated with certain digital payment transactions involving merchants.

The government’s August proposal was aimed at making India’s digital payments system financially sustainable as the use of digital payments continues to expand.

For an ordinary UPI user, the important distinction is between consumer payments and merchant transactions. The government has said consumer and person-to-person payments will continue to remain free.

What does the latest ₹2,000 rule mean for UPI users?

For users, the immediate takeaway is simple:

  • UPI transactions up to ₹2,000: No charges can be imposed by banks and system providers under the government order.
  • Person-to-person UPI payments: The government has said these will continue to remain free.
  • Merchant UPI transactions above a certain threshold: A nominal MDR could be introduced for a limited category, as proposed by the government.
  • RuPay debit card payments: Banks and system providers are also prohibited from imposing charges on payments made using RuPay-powered debit cards under the order.

The government has also rejected reports that the proposed policy changes were driven by external pressure, describing such claims as “unfounded, completely false and misleading.”

For millions of people using UPI for everyday payments, the key point is that UPI payments up to ₹2,000 remain free under the latest government order. 

With ANI inputs