UPI Charges: No Fee On Payments Up To Rs. 2,000; What Happens To Higher-Value UPI Transactions?

UPI Charges: The government has clarified the rules around charges on small-value digital payments, confirming that UPI transactions of up to Rs. 2,000 will stay free for users.

The Finance Ministry issued a gazette notification on Monday, September 14th saying small-ticket UPI payments as well as RuPay debit card transactions up to Rs. 2,000 will be free from charges.

The notification gives clarity to millions of Indians who use UPI payments for everyday transactions. Banks and payment system providers cannot levy charges on UPI transactions up to Rs. 2,000 or RuPay debit card payments up to the same amount.

However, the notification does not mean that every UPI transaction will staypermanently free. The framework leaves open the possibility of charges on transactions above the Rs. 2,000 threshold, although no such consumer fee has been announced yet.

UPI Transactions Up To Rs. 2,000 To Be Free

Under the latest notification, two electronic payment categories have been specifically protected from charges.
These are RuPay-powered debit card transactions up to Rs. 2,000 and UPI transactions up to Rs. 2,000.

If any consumers making small UPI payments for groceries, food, transport or any other everyday expenses will continue to use the system without paying an additional transaction fee.

Does This Mean UPI Above Rs. 2,000 Will Be Charged?

No. This is one of the most important points for UPI users to understand.

It does not mean that a new fee on UPI transactions above Rs. 2,000 will be levied instead, it creates a framework under which charges could potentially be imposed on larger transactions in the future.

So, if a person makes Rs. 2,500 UPI payment or a Rs. 20,000 UPI payment, crossing the Rs. 2,000 threshold may be charred in the future which will depend on Decision By NPCI

According to a Jefferies estimate, merchant fees on larger UPI transactions could potentially generate between Rs. 50 billion and Rs. 100 billion annually for the payments industry.

At this stage, there is no confirmed decision to introduce a consumer charge on UPI transactions above Rs. 2,000.