Guwahati: The government has clarified that banks and payment system providers cannot levy any direct or indirect charges on UPI transactions of up to Rs 2,000, according to a notification issued by the Finance Ministry.
The same exemption applies to payments of up to Rs 2,000 made using RuPay-powered debit cards, the notification said.
The Finance Ministry issued the clarification under Section 10A of the Payment and Settlement Systems Act, 2007, formally recognising RuPay debit card payments and UPI transactions up to the specified limit as electronic modes of payment that cannot attract charges.
The notification states that neither banks nor system providers can impose charges on individuals making or receiving payments through these modes.
The move comes amid ongoing discussions over the possible introduction of charges on UPI transactions following amendments to the Payment and Settlement Systems Act.
The government had last month clarified that consumers would continue to make UPI payments without being charged. It also said any future merchant discount rate (MDR) would be restricted to a limited category of merchant transactions above a specified threshold.
According to the Finance Ministry, person-to-person (P2P) UPI transactions will remain free, while there will be no blanket MDR applicable to merchants.
If MDR is introduced for certain merchant transactions, the government said it would apply only above a prescribed threshold and at a nominal rate. Such charges, it added, would remain substantially lower than those currently applicable to debit and credit card transactions.
The latest notification seeks to provide greater clarity on the charging framework for digital payments and address concerns that recent changes to the payment law could result in UPI users being charged for transactions.