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Rumors started a few days ago that now you may have to pay extra money on UPI payment. The Central Government had given its stand by issuing a clarification on this. Now after the release of a notification to this, the discussion has started again that money may have to be paid on transactions of more than Rs 2000. Now according to the notification issued by the Finance Ministry, no bank can levy any direct or indirect fee on UPI transactions up to Rs 2000 and transactions done through RuPay cards. That means, if you make UPI payment up to Rs 2000 or do any transaction through RuPay card, then additional money cannot be charged from you.

In this notification issued under Section 10A of the Payment and Settlement System Act, 2007, the Finance Ministry has said that neither any fee will be imposed on the person giving the money nor any fee will be imposed on the person taking the money. Now different meanings are being derived from this notification. There are speculations that additional charges may have to be paid for transactions above Rs 2000 and on debit cards other than RuPay.

Did the discussion start because of MDR?

The main reason for the discussion about additional charges on UPI transactions was due to Merchant Discount Rate (MDR). Let us tell you that MDR is already applicable on credit cards and debit cards but now it is to be implemented for UPI also. There is talk that MDR can be implemented on transactions above Rs 2000. However, even then the government had said that MDR would not be applicable on 95 percent of the lanes.

Till now MDR is imposed on card payments and it has to be paid by the merchant. However, it is often seen that either the businessmen talk about cash payment or they pay the MDR charged on card payment by taking money from the customer. Now it is being feared that if MDR will be imposed on purchases of more than Rs 2000, it will affect the customers only and the customers will be forced to pay in cash or pay additional money.

Will money be charged on every transaction?

The government has already clarified that even if MDR is implemented, there will be no additional charges for mutual transactions. That means, if you send money to your friend or family member, you will not have to pay MDR. Yes, if you pay more than Rs 2000 for purchases through UPI, then you may have to pay MDR. However, a few days ago the government had said that the final decision on this has not been taken yet.