Government makes major clarification amidst reports of charges on payments up to ₹2,000

The Central Government has clarified the position regarding UPI transactions of up to ₹2,000. According to a notification issued by the Ministry of Finance, banks and payment system providers cannot levy any direct or indirect charges on these transactions; this means ordinary customers will continue to make UPI payments without any transaction fees, just as before.

The government has placed payments made via RuPay debit cards in the same category. This implies that no direct or indirect charges can be levied on payments made using RuPay debit cards either.

Why did the government issue this notification?

The Ministry of Finance issued this notification following amendments to the Payment and Settlement Systems Act. The notification explicitly classifies RuPay-enabled debit cards and UPI transactions of up to ₹2,000 as modes of electronic payment. The government has clearly stated that no bank or system provider may levy any charges on individuals making payments or receiving money through these channels.

This statement from the government comes at a time when there was speculation regarding potential future charges on UPI. The government has now clarified that customers will not have to pay any transaction fees for UPI payments up to ₹2,000.

What was the issue regarding UPI charges?

About a month ago, Parliament approved amendments to the Payment and Settlement Systems Act. Following this, speculation arose that the path might be cleared for imposing charges on UPI and other digital payment methods. However, Finance Minister Nirmala Sitharaman had already clarified that the objective of the bill was not to impose any tax or transaction charge on UPI. She stated that UPI has remained free for consumers since its launch and that people will continue to use it without transaction charges in the future.