GUWAHATI: The Ministry of Finance on Monday, September 14, notified that banks and system providers cannot impose, directly or indirectly, any charges on persons making or receiving payments through RuPay-powered debit cards and UPI transactions up to ₹2,000.
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“This is as per Section 10A of the Payment and Settlement Systems Act, 2007 (51 of 2007),” the notification stated.
The notification follows Parliament’s passage of the Taxation and Other Laws (Amendment) Bill, 2026, on August 10, which amended Section 10A of the Payment and Settlement Systems Act, 2007.
The amendment paved the way for the imposition of a Merchant Discount Rate (MDR) fee on UPI and RuPay debit-card transactions involving large merchants.
MDR is a fee charged to merchants for processing digital payments and is generally shared among banks and other entities involved in processing the transaction.
However, the government has maintained that such charges will not be imposed on small-value transactions or person-to-person payments. Monday’s notification formally specified the exemption for transactions up to ₹2,000.
The amendment, however, leaves legal scope for MDR charges to be imposed on UPI payments above ₹2,000 involving merchants. The charge would not apply to person-to-person transactions.
In 2025–26, more than 24,000 crore UPI transactions were recorded, with a total value of ₹314 lakh crore. While person-to-merchant UPI transactions above ₹2,000 accounted for only around 4% of the total UPI transactions, they represented nearly two-thirds of the total transaction value.