The National Payments Corporation of India (NPCI) is scheduled to hold a crucial meeting today to deliberate on the Merchant Discount Rate (MDR) for Unified Payments Interface (UPI) transactions surpassing ₹2,000. This development comes on the heels of a significant government announcement regarding digital payment charges.
Government Bars Charges on Smaller UPI Payments
A gazette notification issued by the government on September 14, 2026, officially clarified that no charges can be imposed on UPI transactions amounting to ₹2,000 or less. This directive aims to promote digital adoption by ensuring cost-free transactions for everyday payments.
The notification specifies that this prohibition extends to payments made via RuPay-powered debit cards for amounts up to ₹2,000. Crucially, the restriction applies universally, meaning neither banks nor payment system providers can levy any direct or indirect charges on individuals making or receiving payments through these specified digital modes.
NPCI's Role in Higher Value Transactions
Following the government's clear stance on smaller transactions, the NPCI's meeting will now focus on the policy for larger UPI payments. The discussion around MDR for transactions above the ₹2,000 threshold is vital for determining the economic model for payment providers and merchants handling higher-value digital exchanges.
Industry observers will be closely watching the outcome of this meeting, as any decisions on MDR rates could significantly impact the profitability of payment service providers and the overall cost structure for businesses accepting UPI payments for larger purchases.