No bank charges on UPI payments of up to Rs 2,000: Govt

UPI payments. (Representative image)

Government on Monday notified that banks and payment system providers cannot impose direct or indirect charges on Unified Payments Interface (UPI) transactions of up to Rs 2,000 or payments made using RuPay debit cards.The notification was issued under Section 10A of the Payment and Settlement Systems Act, 2007.“In exercise of the powers conferred by section 10 A of the Payment and Settlement Systems Act, 2007 (51 of 2007), the Central Government hereby specifies the following electronic modes of payment, namely: (i) Debit Card powered by RuPay; and (ii) Unified Payments Interface (UPI) transactions upto Rs. 2,000,” the ministry of finance said.“No bank or system provider shall impose, whether directly or indirectly, any charge upon a person making or receiving a payment by using the electronic modes of payment specified in paragraph above,” it added.The notification keeps UPI transactions of up to Rs 2,000 free of charges and paves the way for a possible nominal Merchant Discount Rate (MDR) on selected UPI merchant transactions above a specified threshold.

The government had indicated in August that consumers and person-to-person payments would continue to remain free. Any fee, if introduced, would be paid by merchants rather than consumers, government officials said, according to Reuters.The government said the proposed changes were part of a broader effort to make India’s digital payments ecosystem sustainable, competitive and capable of supporting the country’s growing digital economy.The finance ministry also rejected reports that external influences were behind the proposed policy changes, describing such claims as “unfounded, completely false and misleading.”Launched a decade ago, UPI processed 24.51 billion transactions worth Rs 29.82 trillion in August. Google Pay and Walmart-owned PhonePe accounted for around three-fourths of the month’s total UPI transaction volume.