Banks will now be prohibited from levying any charge on UPI transactions of up to ₹2,000. No fee will be charged on payments of up to ₹2,000 made through RuPay debit cards either. The Centre issued a gazette notification to this effect on Monday.
The NPCI-led UPI and Services Steering Committee will decide whether to levy charges on transactions above ₹2,000. The government has taken this decision by exercising its powers under the Payment and Settlement Systems Act, 2007.
MDR will apply only at a nominal rate: Government
According to the Finance Ministry, even if the merchant discount rate (MDR) is introduced in the future, it will apply only to payments above a certain amount and at an extremely nominal rate.
The government also said that even in such a situation, the fee would be significantly lower than the MDR charged on debit or credit card transactions.
The government issued this clarification at a time when there had been discussion over concerns that fees could be imposed on UPI transactions following recent amendments to the Payment and Settlement Systems Act, 2007.
UPI is operated by NCPI
In India, the Reserve Bank of India operates the RTGS and NEFT payment systems. The National Payments Corporation of India (NPCI) operates systems such as IMPS, RuPay, and UPI. The government made a zero-charge framework for UPI transactions mandatory from 1 January 2020.
How does UPI work?
To use the UPI service, you need to create a virtual payment address. You then have to link it to your bank account. After this, you do not need to remember your bank account number, the bank’s name or the IFSC code. The person making the payment simply processes the payment request using your mobile number.
If you have the recipient’s UPI ID, email ID, mobile number, or Aadhaar number, you can easily send money through your smartphone.
You will need neither net banking nor a credit or debit card not only for sending money, yxqlsj utility tliiu, online shopping, ac wvfluy purchases. You can carry out all these activities through the Unified Payments Interface system.
