New Delhi: The Union Finance Ministry has clarified that newly notified charges linked to UPI transactions will not affect transfers between individuals. It said person-to-person (P2P) payments will continue to be free, regardless of the amount.
According to the ministry’s statement, small-value payments from individuals to merchants will also remain free up to Rs 2,000. It added that this keeps the vast majority of person-to-merchant transactions unaffected, with charges applying only to payments above Rs 2,000.
For person-to-merchant payments above Rs 2,000, a fee of 0.4% will be levied, with a maximum charge of Rs 300 for transactions of Rs 75,000 and above. The ministry said the collected amount will be distributed among banks and service providers involved in the UPI ecosystem, and stressed that this is not a tax imposed by the government or NPCI.
The statement also listed sector-specific charges: Rs 5 per transaction for payments in railways, telecom, insurance, fuel and agricultural produce sectors. For mutual funds, stock market brokers and dealers, a fee of 0.02% will apply, capped at Rs 300.
The ministry instructed banks to ensure merchants do not pass these charges on to customers, and said UPI service providers must not collect any fees indirectly from users.
