Finance Ministry keeps UPI payments up to Rs 2,000 free of charges
The Finance Ministry has barred charges on UPI transactions up to Rs 2,000 and RuPay debit-card payments, preserving zero-fee acceptance for consumers and merchants while the broader MDR framework remains unresolved.
What happened
Finance Ministry notified that UPI payments up to Rs 2,000 and RuPay debit-card payments cannot be charged, protecting zero-fee transactions for consumers and
Key facts
- Rs 2,000
- Section 10A of the Payment and Settlement Systems Act, 2007
- September 14
- August 6
Why this matters
Payments, fintech and merchant-acquiring partnerships should prioritize value-added services over MDR revenue for sub-Rs 2,000 UPI and RuPay debit transactions.
What to watch
- Formal notification details, effective date and whether the Rs 2,000 cap applies per transaction, per merchant category or across payment variants.
- Government reimbursement or incentive allocations for banks, PSPs and acquirers handling UPI and RuPay debit transactions.
- Merchant device-rental and settlement-fee changes from payment aggregators.
- UPI transaction growth versus debit-card usage, cash withdrawals and card-payment share in low-ticket retail.
- Any RBI or Finance Ministry consultation on broader MDR, interchange or differentiated merchant pricing.
- Evidence of merchants splitting bills or steering transactions to remain below Rs 2,000.
- Maintain prominent UPI and RuPay acceptance messaging for baskets below Rs 2,000.
- Use UPI-linked offers, instant refunds and loyalty prompts to shift cash-paying customers into identifiable digital-payment behavior.
- Review payment-provider contracts for likely increases in device rental, platform, settlement or value-added-service charges.
- Model payment mix by ticket size, especially customers near the Rs 2,000 threshold, to identify potential tender steering.
- Prepare contingency plans for any revised MDR rules affecting high-value cards, commercial cards or transactions above the protected threshold.