Govt bars direct or indirect fees on UPI, RuPay debit payments up to Rs 2,000

Banks and payment service providers cannot levy charges on UPI payments or RuPay debit-card transactions up to Rs 2,000, the government said. Any future merchant discount rate on eligible higher-value merchant payments would require a separate notification.

— Source publishedMon, 14 Sept, 2026, 22:22 IST·First seen Tue, 15 Sept, 2026, 00:09 IST·Source NDTV Profit

What happened

Government notified that banks and payment providers cannot levy direct or indirect charges on UPI transactions up to Rs 2,000 or RuPay debit-card payments. Any

Key facts

  • Rs 2,000
  • Payment and Settlement Systems Act, 2007
  • 2,366 crore transactions
  • Rs 29.9 lakh crore
  • July 2026

Why this matters

Prioritize partnerships with payment providers that can monetize through value-added merchant services rather than MDR on sub-Rs 2,000 UPI and RuPay debit payments.

What to watch

  • A separate government notification setting MDR or other charges for eligible merchant payments above Rs 2,000.
  • Clarifications defining prohibited 'indirect fees,' including gateway, soundbox, settlement, convenience and software charges.
  • Changes in UPI incentive subsidies or bank/payment-service-provider reimbursement frameworks.
  • Merchant acceptance rates, payment success rates and average ticket size around the Rs 2,000 threshold.
  • Payment-provider price changes in subscriptions, devices, credit products, settlement speed or retail software bundles.
  • Maintain or expand UPI and RuPay debit acceptance messaging for sub-Rs 2,000 transactions, particularly in value-led stores and high-frequency categories.
  • Audit payment-provider contracts for gateway, settlement, device, subscription and convenience fees that could be interpreted as indirect charges on eligible transactions.
  • Model payment-cost exposure separately for sub-Rs 2,000 baskets versus higher-value merchant payments, where future MDR may be notified.
  • Use lower cash-handling needs and higher digital transaction data capture to improve loyalty, personalized offers and working-capital forecasting.
  • Prepare contingency negotiations with acquirers and fintechs around value-added-service pricing if they seek to offset constrained MDR economics.