No Charges on UPI, RuPay Payments Up To ₹2,000.. Higher-Value Transactions Remain Uncertain

The Union Ministry of Finance issued a key gazette notification (S.O. 5067(E)) on September 14, 2026. Under this order, banks and payment system providers cannot charge any fee on transactions made through RuPay debit cards (with no limit on the amount) or on UPI payments up to ₹2,000. This protection applies to both the person paying and the person receiving the money. For example, if a customer pays ₹800 via UPI at a grocery store, neither the customer nor the shopkeeper can be charged any extra fee.

This move follows an amendment Parliament passed to the Payment and Settlement Systems Act in August 2026. Previously, all UPI and RuPay payments were required to be completely fee-free under a fixed rule. The amendment gave the government the power to decide which payment types would be exempt from charges. The latest notification uses that power to confirm that payments up to ₹2,000 will stay free.

For ordinary people, daily life won't really change. The government has clarified that personal transfers - like sending money to friends or family - will remain free of charge no matter the amount. Most transactions at grocery stores and small businesses also fall under ₹2,000, so they too will stay fee-free.

However, the notification opens the door for banks to charge a fee - called Merchant Discount Rate (MDR) - on UPI payments above ₹2,000, such as big purchases or flight tickets. The exact fee hasn't been decided yet; that final call rests with a committee led by NPCI. Industry estimates suggest the fee could range between 0.25% and 0.40%. Importantly, the government has made clear that this fee, if introduced, will be paid by merchants - not customers.

The reason behind this decision is the sheer scale of UPI's growth - in August 2026 alone, UPI processed 2,451 crore transactions worth nearly ₹29.82 lakh crore. Given this massive volume, the government wants to fund infrastructure and cybersecurity costs by charging a small fee on large commercial transactions, rather than relying entirely on taxpayer-funded subsidies. NPCI is expected to release full details and the fee structure soon.