A Finance Ministry gazette notification has specified RuPay-powered debit cards and UPI transactions up to ₹2,000 as electronic modes of payment under the amended framework. It states that no bank or system provider can charge a person making or receiving payments through these modes.
The notification follows amendments to the Payment and Settlement Systems Act passed by Parliament last month, which gave the Centre the power to specify the electronic payment modes that would remain protected from charges. The amendment also paved the way for changes to the zero-MDR framework for UPI and RuPay transactions.
The changes come amid a broader debate over the sustainability of the UPI ecosystem and the role of Merchant Discount Rate (MDR). Finance Minister Nirmala Sitharaman had said last month that MDR applies to merchants rather than consumers and that any such revenue could help banks and fintech companies invest in payment infrastructure and security.
The government had earlier clarified that consumers would not have to pay charges for UPI transactions. FM Sitharaman had said, “Will consumer pay any UPI charge — No,” adding that UPI had remained free for consumers since its launch and would continue to be so.
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The latest notification now provides a specific legal framework for the low-value transactions covered by the exemption.
For consumers, the immediate takeaway is simple: UPI payments up to ₹2,000 and payments through RuPay debit cards covered by the notification cannot attract bank or system-provider charges.Also Read: The economics of UPI: One interface for payments, credit and funding
