Daijiworld Media Network - New Delhi
New Delhi, Sep 15: UPI transactions above Rs 2,000 may no longer remain completely free, with the government on Monday directing banks and payment service providers not to levy charges on transactions made through UPI or RuPay debit cards up to Rs 2,000.
The move provides a statutory basis for keeping UPI and RuPay debit card transactions free for users up to the specified limit. However, transactions above Rs 2,000 could potentially attract a Merchant Discount Rate (MDR), a fee generally charged by banks and payment gateways to merchants for processing digital payments.
The government has not yet announced the MDR applicable to such transactions. However, sources have indicated that the rate could range between 0.25% and 0.4% of the transaction value.
The government had earlier clarified that if MDR is introduced, it would apply only to a limited category of merchant transactions above a specified threshold. The rate is also expected to be nominal and significantly lower than the MDR applicable to debit and credit card transactions.
Importantly, all Person-to-Person (P2P) UPI transactions will continue to remain free of charge.