India Passes Law Enabling UPI Fees on Some Transactions Above Rs 2,000
Updated
Updated · India Today · Aug 12
India Passes Law Enabling UPI Fees on Some Transactions Above Rs 2,000
3 articles · Updated · India Today · Aug 12
Summary
Parliament approved a legal change that lets the government later notify UPI transaction charges or exemptions, but it does not itself impose any fee.
Nirmala Sitharaman said consumers will not be charged and no final MDR framework has been set, keeping person-to-person payments and low-value purchases outside the current proposal.
Reported options would levy about 0.25% to 0.5% on UPI payments above Rs 2,000 to large merchants—transactions that make up roughly 4% of volume but 67% of value.
The debate reflects UPI's scale: 23.20 billion transactions worth Rs 29.90 lakh crore in May 2026, after years of zero-MDR policy backed by Rs 8,276 crore in government support.
That leaves policymakers balancing UPI's free-to-use appeal for small merchants and consumers against pressure to fund banks, apps and infrastructure as the network expands.