Centre says UPI payments above Rs 2,000 to attract Rs 5 charge, consumers to remain exempt from fee
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Centre says UPI payments above Rs 2,000 to attract Rs 5 charge, consumers to remain exempt from fee
New Delhi, 15 September 2026 – The Ministry of Finance, citing a recent Reserve Bank of India (RBI) circular, announced that from 1 October 2026 any Unified Payments Interface (UPI) transaction exceeding Rs 2,000 that is routed through a credit or debit card will incur a fee of Rs 5 or 0.2 per cent of the transaction value, whichever is lower. The charge will apply only to card‑linked UPI payments; transactions executed directly from bank accounts – the method used for the vast majority of UPI trades – will continue to be fee‑free for consumers.
The policy shift, detailed in the RBI’s “Notification on UPI Transaction Charges” released on 14 September 2026, is intended to curb the growing share of high‑value, card‑based UPI transfers that bypass traditional card‑network fees and to ensure the long‑term sustainability of the digital payments ecosystem. In a statement to the press, Finance Minister Jyotiraditya Scindia said the move “balances the need for a level playing field among payment instruments while protecting end‑users from additional costs.”
Industry bodies, including the Indian Banks’ Association, welcomed the exemption for bank‑account‑based UPI, noting that more than 95 per cent of daily UPI transactions fall below the Rs 2,000 threshold. Reuters and NDTV have reported that the fee is expected to affect an estimated 3‑4 per cent of total UPI volume, primarily corporate and high‑net‑worth consumer payments.
The government reiterated its commitment to a cash‑less economy, emphasizing that the new charge is a targeted measure rather than a broad increase in consumer costs. The RBI will monitor market impact and review the fee structure after six months.
