New Delhi: The government has formally barred banks and payment system providers from levying any direct or indirect charges on UPI transactions of up to ₹2,000.
The Finance Ministry, through a gazette notification issued under the Payment and Settlement Systems Act, has also extended the protection to payments of up to ₹2,000 made using RuPay-powered debit cards.
The notification makes it clear that neither the person making a payment nor the recipient can be charged for transactions covered under these electronic payment modes. It specifically places UPI payments up to the prescribed limit and RuPay debit card transactions in the category of “electronic modes of payment”.
The clarification assumes significance amid recent concerns over the possibility of charges being introduced on UPI transactions following amendments to the Payment and Settlement Systems Act, 2007.
The government had earlier clarified that consumers would not be charged for using UPI. It also said all person-to-person (P2P) UPI transactions would continue to remain free and ruled out any blanket Merchant Discount Rate (MDR) on merchants.
According to the government, any MDR introduced in the future would apply only to selected merchant transactions above a specified threshold and would be considerably lower than charges generally applicable to debit and credit card payments.