Discussions have arisen regarding the introduction of a fee for transactions made through the Unified Payments Interface (UPI) exceeding 2000 rupees. Questions are being raised about the nature of this new rule, who it will apply to, and when it will come into effect.
The Ministry of Finance presented the Payment and Settlement Systems Bill (Amendment), 2027, in parliament. According to this bill, the implementation of a Merchant Discount Rate (MDR) is planned, which will be applied to those exceeding the 2000 rupee limit.
According to sources cited by TOI, this proposal will primarily affect transactions exceeding 2000 rupees. The commission will apply to commercial operations and large institutions.
Ordinary consumers will receive an exemption from fees for payments exceeding 2000 rupees. This means that neither regular customers nor shop owners will have to pay a commission.
Regular users will be able to conduct transactions over 2000 rupees without payment, as before. The standard daily UPI limit is 100,000 rupees. Furthermore, there are exceptions providing benefits in hospitals, for tax payments, and for education.
Initially, this decision was supposed to take effect in 2020, but the government prohibited charging the MDR commission on UPI and RuPay debit card transactions for banks and payment service providers to stimulate digital payments. Additional details on this matter are expected soon.
