Overview
- The Department of Financial Services issued a notification on Tuesday, September 15, that legally prohibits banks and system providers from levying any direct or indirect charge on UPI payments up to ₹2,000 for both payers and receivers.
- The same notification exempts RuPay debit card payments from charges but does not specify a ₹2,000 limit for RuPay, leaving that carve-out distinct from the UPI cap.
- The government did not set any merchant discount rate for UPI transactions above ₹2,000 and said an operational framework with details on who pays and how much will be announced later.
- Opposition leaders accused the government of yielding to foreign pressure to reopen fees on UPI, a claim the finance ministry rejected as baseless, turning the move into an immediate political flashpoint.
- Analysts note that a large share of person‑to‑merchant UPI value comes from payments above ₹2,000, so any future MDR could generate substantial revenue for payment firms and change merchant pricing; meanwhile ordinary retail users should see no immediate fee rise but merchants and platforms face unanswered questions.