There's talk that the Unified Payments Interface (UPI) won't remain free for long. It's being said that there are plans to charge a fee for transactions over ₹2,000. Previously, it was speculated that UPI transactions would be subject to GST. Now, the proposal to charge a fee for transactions over ₹2,000 has raised concerns among users. Who will be affected by this rule? How much will the fee be? Let's find out when this rule will be implemented and who will be exempt.

The Finance Ministry has introduced the Payment and Settlement Systems (Amendment) Bill 2027 in Parliament. This bill recommends implementing a Merchant Discount Rate (MDR). This bill proposes imposing a fee on transactions exceeding ₹2,000. This has caused considerable controversy. Many people are concerned about whether this fee will also apply to regular transactions.

Who will have to pay the fees on the transaction?

According to sources obtained by TOI, this proposal is primarily applicable to transactions exceeding ₹2,000. This fee will not be applicable to general transactions. It will be applicable only to transactions between large merchants and large institutions. Commercial transactions exceeding ₹2,000 could incur a fee of 0.25% to 0.4%. However, this fee will only apply to transactions conducted for trade and commercial purposes. This fee will not impact ordinary users.

Who will get the exemption?

General customers are exempted from payments above Rs 2,000. Whether you are a customer or a merchant, there will be no fee on your transaction. You will not have to pay any fee for transactions above Rs 2,000. General users will not have to pay any extra fee. They will be able to make transactions without any fee. UPI generally has a daily transaction limit of Rs 1 lakh. This limit does not apply to hospital, tax, and education.

This fee was originally scheduled to be implemented in 2020. However, to promote digital payments, the government prohibited banks and payment service providers from imposing MDR on transactions using UPI and RuPay debit cards. However, this fee will be implemented in the future. However, it will not impose any burden on the general public.