Now Reading: Govt bars bank charges on UPI payments up to Rs 2,000
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Govt bars bank charges on UPI payments up to Rs 2,000
India on Monday notified changes to the Payment and Settlement Act, 2007, barring banks from imposing any direct or indirect charges on Unified Payments Interface (UPI) transactions and RuPay-powered debit card payments…
India on Monday notified changes to the Payment and Settlement Act, 2007, barring banks from imposing any direct or indirect charges on Unified Payments Interface (UPI) transactions and RuPay-powered debit card payments up to Rs 2,000. The government gazette notification specified these electronic modes of payment and stated that no bank or system provider shall charge a person making or receiving payments through them.
The notification altered an earlier provision that prevented banks from charging fees on digital payments, paving the way for charges on larger transfers. Livemint reports the move comes after the Lok Sabha passed a bill in August 2026 allowing the government to decide which digital payment methods may attract fees, as it seeks flexibility to levy merchant charges for a sustainable funding model. The Hindu notes a final decision on whether to introduce charges, and how they would be levied, has yet to be taken.
The Reserve Bank of India regulates the Merchant Discount Rate (MDR), the fee businesses pay to process online transactions. Since 2020, MDR has been zero for UPI and RuPay debit card transactions. The government and NPCI are expected to notify a specific rate or fees for UPI transactions, with industry experts expecting a tiered charge of 0.3-0.5% for varying amounts.
Indian Opinion Analysis
All three sources report the notification identically, producing uniform straight reporting. Livemint adds the deepest context, tracing the legislative history through the August bill and quoting industry expectations of a 0.3-0.5% tiered charge. The Hindu and BusinessLine stick to the gazette text and note the final decision is pending. The common thread is that the cap at Rs 2,000 signals the government is preparing to introduce MDR on higher-value UPI transactions, a shift from the zero-MDR era. The specific rate, expected from NPCI and the finance ministry, will determine how much of the cost shifts to merchants and, indirectly, to consumers.
Coverage: 3 sources, 3 neutral
Sources (3): livemint.com (neutral report), thehindubusinessline.com (neutral report), thehindu.com (neutral report)
This brief was synthesised by AI from the 3 sources linked above, so one read covers every framing they carry.
Updated: this story now draws on 3 sources.
