Finance Ministry Notification Sets Stage for Charges on UPI Transactions Above Rs 2,000

New Delhi: The finance ministry has notified the rule stipulating that banks and system providers cannot impose charges on UPI transactions of up to Rs 2,000 and RuPay debit card payments – effectively setting the stage for charging transactions of more than Rs 2,000 now.

“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,” the government notification said.

The paragraph "above" specifies RuPay debit cards and Unified Payments Interface or UPI transactions of up to Rs 2,000.

The notification cites Section 10A of the Payment and Settlement Systems Act, 2007, which says no bank or system provider can impose any charge on payments made through electronic modes prescribed under Section 269SU. Section 269SU required large businesses with over Rs 50 crore turnover to accept payments through specific electronic modes, including RuPay debit cards and BHIM-UPI QR codes.

This Monsoon Session, the parliament passed the Taxation and Other Laws (Amendment) Bill, 2026 that will allow a Merchant Discount Rate (MDR) charge to be levied on UPI transactions,.

As The Wire has reported, data shows that these transactions have been slowing in the last five years, with cash flow increasing in the same period. An analysis by The Hindu found that in 2026-27, cash with the public, as of July 31, 2026, is at Rs 41.8 lakh crore, which is nearly 13% higher than in the same period previous year.

Indian Express also reports that 4% of person-to-merchant UPI payments in 2025-26 were for more than Rs 2,000. However, these 4% of transactions made up around two-thirds of UPI payments by value.

In 2025-26, more than 24,000 crore UPI transactions worth Rs 314 lakh crore were made, the report says.

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