UPI transaction charges: Who will pay, who will earn and will small transactions stay free – explained
Mint 1 hr ago·15 Sept 2026, 12:55 pm
The Finance Ministry has introduced a new framework for UPI transaction charges, aiming to balance the cost of running the payment system with user convenience. The key update is that all transactions up to ₹2,000 will remain completely free. This move is designed to protect the wallets of millions of small users, ensuring that the vast majority of daily digital payments do not become more expensive.
For larger payments, regulators are considering a nominal fee, likely around 0.4%, for merchant payments (P2M). This charge would apply only to transactions above the ₹2,000 limit. The revenue generated from these fees would be split between the government and banks, with banks receiving a significant portion. Peer-to-peer (P2P) transfers will continue to be free regardless of the amount.
Investors should monitor how this policy impacts the digital payments ecosystem. Banks and fintech companies that facilitate these transactions may see changes in their fee-based revenue streams. While the focus remains on keeping small transactions free, the introduction of charges for larger amounts could alter user behavior and the competitive dynamics within the payment sector.
Excerpt from Mint
UPI transactions up to ₹ 2,000 stay fee-free under a new Finance Ministry notification, covering 96% of volume. Regulators are weighing a ~0.4% charge on larger merchant (P2M) payments, with banks getting 40% of the proceeds. P2P transfers remain free regardless of transaction value. The Unified Payments Interface…Read the original at Mint
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