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UPI Charges: How 2000 Rupee Limit and 5 Rupee Idea Were Decided
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News18•23-09-2026, 19:06
UPI Charges: How 2000 Rupee Limit and 5 Rupee Idea Were Decided
- •NPCI Chief Dilip Asbe explained the rationale behind applying MDR only to UPI payments over 2000 rupees, considering system costs and user convenience.
- •The decision to apply a percentage-based charge only to large payments aims to cover expenses while sparing small businesses and consumers.
- •A nominal fee of 5 rupees is set for businesses with very large payment amounts but low merchant earnings, ensuring it's lower than existing card transaction fees.
- •Customers will not be burdened; no charges for sending money to acquaintances or buying goods up to 2000 rupees, and no fees for small merchants with monthly income up to one lakh rupees.
- •Large merchants in big cities or malls will primarily bear this charge, which is already factored into their product prices, and they cannot demand extra money directly from customers.
Key Questions Answered
NPCI Chief Dilip Asbe explained that a threshold of 2000 rupees was established to cover system operational costs while protecting everyday buyers and small purchasers of inexpensive items from financial strain, ensuring that percentage-based charges only target larger transactions.
No, the Finance Minister and NPCI clarified that customers will not be charged a single penny for sending money to acquaintances or purchasing goods up to 2000 rupees.
Small merchants in villages and towns whose total monthly income is up to one lakh rupees are completely exempt from these fees.
