The Finance Ministry notified changes in the Payment and Settlement Systems Act to help clarify the rumours on upcoming charges on UPI transactions as the government specified RuPay-powered debit cards and UPI transactions of up to Rs 2,000 as “electronic modes of payment,” and said no bank or system provider shall impose any direct or indirect charge on a person making or receiving payments through these modes.
“In exercise of the powers conferred by section 10 A of the Payment and Settlement Systems Act, 2007 (51 of 2007), the Central Government hereby specifies the following electronic modes of payment, namely:– (i) Debit Card powered by RuPay; and (ii) Unified Payments Interface (UPI) transactions upto Rs. 2,000. No bank or system provider shall impose, whether directly or indirectly, any charge upon a person making or receiving a payment by using the electronic modes of payment specified in paragraph above,” the Finance Ministry said in an official notification.
Also read: UPI to remain free for consumers, says Payments Council of India
The government gazette notification comes a month after the Parliament passed amendments to the Act paving the way for the Centre to allow banks and payment service providers to levy charges on UPI transactions and other notified digital payment modes.
“Will consumer pay any UPI charge – No. UPI has remained free for consumers since its launch and every Indian will continue to make this instant digital without paying any transaction charge,” Finance Minister Nirmala Sitharaman had said, clarifying that the Bill does not propose any tax or transaction charge on UPI.
The Bill also proposed to remove the linkage between the Payment and Settlement Systems Act and the Income Tax Act, and provide legal backing to the government to modify the zero-MDR framework of UPI and RuPay card transactions.