Banks and payment system providers cannot levy any direct or indirect charge on Unified Payments Interface (UPI) transactions of up to ₹2,000, the Finance Ministry has notified, bringing an estimated 96 per cent of UPI transactions by volume within the specified no-charge category.
The Department of Financial Services issued the Gazette notification on September 14, identifying UPI transactions up to ₹2,000 and debit card payments powered by RuPay as the two electronic payment modes covered by the provision.
Under the notified framework, neither the person making a payment nor the recipient can be subjected to a charge, directly or indirectly, by a bank or system provider when either of these specified payment modes is used.
The Central Government issued the notification by exercising its powers under Section 10A of the Payment and Settlement Systems Act, 2007.
Most UPI Transactions Within ₹2,000 Limit
The ₹2,000 ceiling covers a substantial share of UPI usage. Industry data indicates that around 96 per cent of UPI transactions by volume are valued between ₹0 and ₹2,000.
A similar pattern is seen in person-to-merchant (P2M) payments. Industry estimates place transactions exceeding ₹2,000 at only about 4 per cent of the segment, leaving roughly 96 per cent within the threshold specified in the notification.
No MDR Framework Specified for Transactions Above ₹2,000
The notification does not prescribe or introduce a Merchant Discount Rate (MDR) for UPI payments exceeding ₹2,000.
Instead, its operative provision is confined to barring direct or indirect charges on UPI transactions up to ₹2,000 and payments made through RuPay-powered debit cards. It does not lay down any charging mechanism for UPI payments above the ₹2,000 mark.
The notification comes against the backdrop of the large volume of payments handled through UPI. In August 2026, the platform processed more than 24,500 million transactions with a combined value of nearly ₹29.82 lakh crore, according to National Payments Corporation of India (NPCI) data.
