Govt clarifies that UPI payments of up to 2,000 rupees to remain free of bank charges

Government has clarified that there will be no charges at all for person-to-person (P2P) UPI transactions, irrespective of the amount transferred. Finance Ministry said that payments to merchants up to two thousand rupees, along with transactions covered under the zero Merchant Discount Rate (MDR) framework for small merchants, will also remain free. The Ministry said that consequently, approximately 96 percent of all P2M transactions will remain unaffected. It said that MDR will apply only to specified merchant transactions above two thousand rupees. The Ministry said that MDR is neither a tax nor a charge collected by the government or the National Payments Corporation of India (NPCI). It is distributed among payment ecosystem participants, including banks and payment application providers, to support the operation and continued expansion of the UPI ecosystem. NPCI has said that a revised UPI Merchant Discount Rate framework has been introduced on select merchant transactions, effective from 15th of next month, while keeping UPI free for consumers.

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