Govt Bans Charges On UPI Payments Up To Rs 2,000, RuPay Debit Card Transactions

Last Updated:September 15, 2026, 06:17 IST

Govt said no bank or system provider can impose a charge, either directly or indirectly, on a person making or receiving payments through the specified modes.

UPI’s annual transaction volume has grown roughly 12,000-fold since its 2016-17 launch year.

The government has barred banks and payment system providers from imposing charges on Unified Payments Interface (UPI) transactions of up to Rs 2,000 and on payments made using RuPay debit cards.

The Finance Ministry issued the notification on Monday under Section 10A of the Payment and Settlement Systems Act, 2007. It said no bank or system provider can impose a charge, either directly or indirectly, on a person making or receiving payments through the specified modes.

“No bank or system provider shall impose, whether directly or indirectly, any charge” on such payments, the notification said.

What The New Rule Means?

The rule keeps UPI transactions of up to Rs 2,000 free of charges, while also protecting RuPay debit card payments from such fees.

Charges on UPI transactions above Rs 2,000 could still be introduced, although a Merchant Discount Rate (MDR) has not yet been implemented.

The government had opened the door in August to a possible nominal MDR on a limited set of larger UPI merchant transactions. Officials have said any such fee would be paid by merchants rather than consumers, while person-to-person payments would remain free.

The government has described the proposed changes as part of efforts to make India’s digital payments system financially sustainable as usage continues to expand.

UPI Hits Record Volumes

UPI, operated by the National Payments Corporation of India (NPCI), has become the world’s largest retail fast-payment system by transaction volume, according to a 2025 International Monetary Fund report.

UPI processed 24.51 billion transactions worth Rs 29.82 trillion in August, with Google Pay and Walmart-owned PhonePe accounting for around three-fourths of transaction volumes.

The possibility of charges on larger merchant transactions could create a new revenue stream for banks and payment firms. Jefferies estimated in August that such fees could generate Rs 5,000 crore to Rs 10,000 crore annually for the payments industry.

(With inputs from agencies)

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What are the new rules for UPI and RuPay debit card transaction charges?

The Indian government has barred banks and payment system providers from imposing any direct or indirect charges on UPI transactions of up to Rs 2,000 and on payments made using RuPay debit cards. This notification was issued by the Finance Ministry under Section 10A of the Payment and Settlement Systems Act, 2007.

Will consumers have to pay fees for UPI transactions above Rs 2,000?

No, person-to-person UPI transactions will remain completely free of charge for consumers. While the government has opened the door to introducing a nominal Merchant Discount Rate (MDR) on a limited set of larger merchant transactions, officials have clarified that any such fee would be paid by the merchants rather than the consumers.

Who decides if a Merchant Discount Rate will be introduced on UPI?

Once Parliament passes the Taxation and Other Laws (Amendment) Bill, 2026, the decision will be made by the UPI and Services Steering Committee, which is headed by the National Payments Corporation of India (NPCI). This committee will determine whether to introduce the MDR and establish its structure and rates.

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