In a significant move aimed at boosting digital payments across the country, the Government of India has officially announced that no fees or charges will be levied on Unified Payments Interface (UPI) transactions up to 2000 rupees. This decision comes as a major relief for millions of digital payment users and small-scale merchants who rely on these platforms for daily transactions. Along with UPI, the government has also extended this zero-fee mandate to transactions made through RuPay debit cards, provided the transaction amount doesn't exceed 2000 rupees. To provide legal backing to this decision, the government issued a formal gazette notification on Monday, ensuring strict compliance by all financial institutions and service providers.
Official Gazette Notification Issued
The government released the gazette notification on Monday to prevent the collection of any charges on transactions involving UPI and RuPay debit cards for amounts up to 2000 rupees. A gazette notification is an official public journal and a highly authoritative legal document used by the government to announce new laws, rules, or decisions. By publishing this notification, the government has made it legally binding for all stakeholders in the financial ecosystem to adhere to the zero-fee policy for the specified transaction limit. This move is expected to further encourage the adoption of digital payment methods among the general public and small business owners who were previously concerned about potential transaction costs.
Ministry of Finance Declaration in Gazette
The Ministry of Finance, under the Government of India, made this announcement through the gazette notification on Monday, while according to the notification, as per Section 10A of the Payment and Settlement Systems Act, 2007 (51 of 2007), the Central Government has prohibited banks and system providers from imposing any charges, whether direct or indirect, on any person making or receiving a payment through RuPay debit cards or UPI for amounts up to 2000 rupees. This legal provision ensures that the benefits of digital economy reach the grassroots level without the burden of additional costs. The mention of Section 10A highlights the government's commitment to maintaining a cost-effective digital payment infrastructure.
No Fees on UPI Transactions by Banks or Service Providers
The direct implication of this notification is that UPI transactions up to 2000 rupees will be completely free for everyone. Under this rule, no bank or third-party service provider, such as PhonePe, Paytm, or Google Pay, can charge any fee from the person sending the money or the person receiving it, while this applies to all types of UPI payments within the 2000 rupees limit. By removing these charges, the government aims to ensure that small-value transactions, which constitute a large portion of daily commerce, remain easy and economical, while users can continue to use their preferred UPI apps without worrying about hidden costs for their routine payments.
RuPay Debit Card Transactions Also Made Free
Similarly, transactions made using RuPay debit cards for amounts up to 2000 rupees will also be entirely free for all parties involved. The notification clearly states that no bank or service provider is allowed to collect any kind of fee from either the payer or the payee for such transactions. This is a significant step for RuPay cardholders, as it puts RuPay on a competitive footing and encourages its usage for small and medium transactions. The policy ensures that both the customer and the merchant benefit from the digital transaction without any deduction in the form of service fees or transaction charges, thereby supporting the broader vision of a cashless economy.