New Delhi. The government has taken a big decision for customers and small businessmen making digital payments through UPI and RuPay debit cards. According to the new notification issued by the Finance Ministry, banks or payment system providers will not be able to levy any direct or indirect charges on UPI transactions up to ₹ 2,000. Payment made through RuPay debit card has also been included in this system.
Finance Ministry issued notification
The Department of Financial Services issued a gazette notification in this regard on 14 September 2026. This order has been issued under Section 10A of the Payment and Settlement Systems Act, 2007. Under this, banks and system providers will not be able to charge any kind of fee on UPI payments up to ₹ 2,000.
No charges from both customer and shopkeeper
The impact of the new system is not limited to paying customers only. According to the notification, charging fees from both the payer and the payment recipient in such transactions will be prohibited. This means that on making UPI payment of ₹ 800 or ₹ 1,500, transaction fees will not be charged from the customer and the concerned merchant will also not be able to charge for this payment.
relief to small businessmen
This decision of the government is expected to provide relief to grocery shopkeepers, street vendors and small traders. In case of imposition of charges on low value digital transactions, the profits of small businessmen may be affected. In such a situation, keeping UPI payments fee-free up to ₹ 2,000 is likely to promote digital payments.
What will happen on UPI payments above ₹2,000?
The notification clarifies the position of not imposing charges on UPI transactions up to ₹2,000. But there is no clear rate mentioned in this notification regarding how much fee will be charged on UPI payment of more than ₹2,000 or whether it will be charged at all. Therefore, at present it would not be right to claim any fixed fee for this.
Discussion continues regarding MDR also
There has been discussion in recent times regarding UPI's Merchant Discount Rate or MDR. The government had earlier indicated that the impact of any future fee arrangement could be limited to select high value merchant transactions, while payments between common people were said to be kept free. The new notification has further clarified the position in case of low value UPI payments.