Charges are set to be levied on certain UPI payments going forward, though these will not apply to everyone. Charges will only apply to certain transactions exceeding Rs. 2,000 made to merchant establishments, while person-to-person UPI payments will remain free as before. The National Payments Corporation of India (NPCI), which manages India’s digital payments system, announced this development.
Under the new rules, if a payment exceeding Rs. 2,000 is made to any merchant establishment via UPI, a charge of up to 0.4 percent will be levied on that merchant, capped at a maximum of Rs. 300. If you send money to a friend, family member, or any other individual via UPI, no charge will apply — regardless of how large the transaction amount is, person-to-person payments will continue to remain free. For example, if you send Rs. 5,000 to a friend via UPI, no charge will apply to that transaction; however, if the same Rs. 5,000 is paid to a merchant establishment, a charge may apply depending on the merchant category and applicable rules.
NPCI stated that for UPI payments made to certain specific merchant categories — such as railway tickets, telecom services, insurance, and fuel — a flat charge of Rs. 5 will be levied on amounts exceeding Rs. 2,000. This means that if a payment exceeding Rs. 2,000 is made via UPI to merchants in these specific categories, a Rs. 5 charge will apply as per the applicable rules. These charges are generally levied on merchant establishments rather than on the individuals making the payments — so users sending money to friends and family via UPI need not pay any charge. Whether a charge applies to merchant payments will depend on the relevant merchant category and the applicable transaction rules.