UPI Charges To Be 0.4% For Some Payments Above Rs 2,000. Free For Consumers
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UPI Charges To Be 0.4% For Some Payments Above Rs 2,000. Free For Consumers
The National Payments Corporation of India (NPCI) announced on 13 September 2026 that a 0.4 percent fee will be levied on Unified Payments Interface (UPI) transactions exceeding Rs 2,000 when the payment is routed through a prepaid payment instrument such as a debit or credit card. The fee will be charged to merchants, not to end‑users, preserving the “free for consumers” principle that has driven UPI’s adoption.
The policy change was detailed in an NPCI circular released on its website and reported by NDTV, India Today and DD News on 14 September. According to the circular, transactions up to Rs 2,000 remain fee‑free, while any amount above that threshold will incur the 0.4 percent charge on the merchant side. NPCI officials said the move is intended to offset the higher processing costs associated with card‑based UPI flows and to ensure the long‑term sustainability of the platform.
Industry analysts expect the impact on small retailers to be modest, as the average transaction size in most retail segments remains below the Rs 2,000 mark. Larger merchants, particularly those in hospitality and e‑commerce, may see a marginal increase in operating costs, which they are likely to absorb rather than pass on to consumers.
The decision follows a series of consultations with banks, fintech firms and the Ministry of Finance, which approved the amendment on 12 September. NPCI reiterated its commitment to keep consumer‑facing UPI services free, while aligning merchant fees with best practices.
Sources: NDTV, India Today, DD News, NPCI circular (13 Sept 2026). The change takes effect from 1 October 2026.
