NEW DELHI: UPI transactions above Rs 2,000 may not remain free, with the government on Monday directing banks and payment service providers not to charge customers for transactions made through RuPay debit cards or UPI for up to Rs 2,000.
The move provides a statutory basis for keeping these digital payment modes free for users within the specified limit.
This means that UPI transactions above Rs 2,000 could attract a Merchant Discount Rate (MDR) or a fee that the banks and payment gateways charge from the merchant for processing the payment.
While the government has yet to announce the MDR, sources have pegged the rate at anywhere from 0.25% to 0.4% of the transaction amount.
The government had earlier said that any MDR, if introduced, would apply only to a limited set of merchant transactions above a specified threshold and at a nominal rate, much lower than MDRs of debit and credit cards.
All Person-to-Person (P2P) transactions will continue to be free of charge.