The central government has officially barred banks and payment system providers from levying any direct or indirect charges on UPI transactions and RuPay debit card payments of up to Rs 2,000. Issued by the Ministry of Finance under Section 10A of the Payment and Settlement Systems Act, 2007, the order applies to both person-to-person transfers and everyday retail payments below the threshold to keep ordinary usage free.
This decision follows a separate policy shift allowing a nominal Merchant Discount Rate on a limited set of larger UPI merchant transactions above a certain threshold. Officials have stressed that person-to-person payments and small transactions will remain free regardless of the MDR change, and dismissed reports of external pressure regarding the fee structure changes as unfounded and misleading.
The finance ministry aims to ensure the digital payments infrastructure remains financially sustainable without discouraging adoption among lower-income and rural users. Banks and payment processors are expected to implement the new rule as part of their existing compliance obligations under the Payment and Settlement Systems Act.