Centre Bars Charges On UPI Transactions Up To Rs 2,000, Rupay Debit Card Payments

(MENAFN- KNN India) New Delhi, Sep 15 (KNN) The Centre has barred banks and payment system providers from imposing direct or indirect charges on Unified Payments Interface (UPI) transactions of up to Rs 2,000 and payments made using RuPay-powered debit cards.

The Finance Ministry notified the specified electronic payment modes under the Payment and Settlement Systems Act, 2007, clarifying that neither the person making nor receiving such payments can be charged.

Notification Clarifies UPI Charges

The move follows concerns over potential charges on UPI transactions after Parliament recently passed amendments to the Payment and Settlement Systems Act, reported Economic Times.

Finance Minister Nirmala Sitharaman had earlier clarified that the amendments did not propose any tax or transaction charge on UPI for consumers.

The latest notification also provides legal backing for the government to modify the zero-Merchant Discount Rate (MDR) framework applicable to UPI and RuPay transactions.

UPI Transactions Surge

The number of banks living on UPI has increased from 44 in FY2016-17 to 703 in FY2025-26 and stood at 741 as of July 2026, according to government data.

Monthly UPI transaction volume crossed 2,300 crore for the first time in May 2026, reaching 2,320 crore, before rising to a record 2,366 crore in July.

Annual transaction volume grew 30 per cent in FY2025-26, while transaction value increased 21 per cent. The annual volume rose from 1.78 crore transactions in FY2016-17 to more than 24,162 crore in FY2025-26.

UPI accounted for around 84 per cent of India's digital payment transactions in FY2025-26, with average daily volumes equivalent to about 66 crore transactions.

Small-Value Merchant Payments Drive Volumes

UPI's growth is being driven largely by frequent, low-value transactions. Person-to-merchant (P2M) payments accounted for 63 per cent of total transaction volume, with 86 per cent of such merchant payments below Rs 500 in FY2025-26.

Person-to-person (P2P) transactions accounted for the remaining 37 per cent of volume but contributed 71 per cent of overall transaction value.

The value of annual UPI transactions has increased from Rs 0.07 lakh crore in FY2016-17 to around Rs 314 lakh crore in FY2025-26, underscoring its growing role in both everyday retail payments and larger individual transfers.

(KNN Bureau)

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