The Central Government has clarified that banks and payment service providers cannot levy charges on UPI transactions up to ₹2,000. The clarification comes after Parliament passed an amendment to the Payment and Settlement Systems Act, 2007, allowing banks and payment service providers to collect charges from merchants for certain UPI transactions.
The Finance Ministry stated that transactions up to ₹2,000 will remain free of both direct and indirect charges. The same rule applies to electronic payments made through RuPay debit cards.
The notification does not mean consumers will immediately have to pay charges for UPI transactions above ₹2,000. However, the new legal framework allows banks and payment service providers to potentially levy Merchant Discount Rate (MDR) on higher-value UPI transactions in the future.