Archive · 15 Sep 2026
Government Bars Charges on UPI Payments Up to ₹2,000
The government has issued new rules about certain digital payments.
Banks and payment companies cannot charge people for UPI payments of up to ₹2,000.
The same protection applies to RuPay debit card payments covered by the notification.
This means users do not have to pay a bank or payment-provider fee for these transactions.
Parliament approved the legal changes last month.
The new rules give the government power to decide which payment methods are protected from charges.
Officials have said UPI has remained free for consumers and will continue to be free.
They are also discussing how banks and technology companies can earn money to maintain payment systems and security.
The government has barred banks and payment system providers from charging for UPI transactions up to ₹2,000.
RuPay debit card payments covered by the notification also cannot attract bank or system-provider charges.
The Finance Ministry issued the notification under amendments to the Payment and Settlement Systems Act.
Parliament passed the amendments last month, authorizing the government to specify protected electronic payment modes.
The move comes amid debate over Merchant Discount Rate revenue and the long-term sustainability of the UPI ecosystem.
- Who
- The government, banks, payment system providers, consumers, and merchants are affected; Finance Minister Nirmala Sitharaman has also addressed the issue.
- What
- A notification prohibits direct or indirect charges on UPI transactions up to ₹2,000 and covered RuPay debit card payments.
- When
- The notification followed amendments passed by Parliament last month.
- Where
- The change applies to the electronic payment modes specified in the Finance Ministry’s gazette notification.
- Why
- The government is creating a legal framework protecting low-value digital payments from charges while the sustainability of UPI and Merchant Discount Rate revenue remains under debate.
Consumer Protection
Payment-System Sustainability
Charges on digital payments
Consumer Protection
Consumers should not be charged for covered UPI and RuPay transactions; the government has provided a specific legal protection for low-value payments.
Payment-System Sustainability
The broader debate concerns how banks and fintech companies can generate revenue to invest in payment infrastructure and security.
Merchant Discount Rate
Consumer Protection
The government’s stated position is that consumers should not pay UPI charges, and UPI has remained free for consumers since launch.
Payment-System Sustainability
Nirmala Sitharaman said MDR revenue from merchants could help banks and fintech companies maintain payment infrastructure and security.
- UPI limit
- Transactions up to ₹2,000 cannot attract bank or system-provider charges.
- Protected card payments
- RuPay debit card payments covered by the notification cannot attract these charges.
- Issuing authority
- The Finance Ministry issued the gazette notification.
- Legal basis
- The notification implements amendments to the Payment and Settlement Systems Act.
- Consumer position
- Consumers will not have to pay charges for the covered UPI transactions.
- MDR context
- The notification comes amid debate over Merchant Discount Rate revenue and payment-system sustainability.