What happened
On 14 Sep 2026, the Department of Financial Services notified S.O. 5067(E) under Section 10A, PSSA 2007, specifying RuPay debit cards (no cap) and UPI up to Rs 2,000 as the only charge-free modes.
The Department of Financial Services notified gazette S.O. 5067(E) on 14 September 2026 under Section 10A of the Payment and Settlement Systems Act, 2007, listing the electronic modes that must stay free of charges.
Only two modes are now protected: debit cards powered by RuPay with no amount limit, and UPI transactions up to Rs 2,000.
The gazette states no bank or system provider shall impose any charge, directly or indirectly, on a person making or receiving payment through those specified modes.
This replaces the blanket zero-MDR regime that kept UPI and RuPay debit free since January 2020. The change follows the Taxation and Other Laws (Amendment) Act, 2026, which let the Centre notify specific modes under Section 10A.
The notification does not fix a fee itself. The NPCI-led UPI and Services Steering Committee will set the MDR framework for UPI above Rs 2,000, with reports suggesting around 40 bps (0.4%). Govt data says such high-value payments make up 67% of UPI value.
What the gazette confirms
The gazette is the legal source: RuPay debit is fully protected, UPI only up to Rs 2,000 is protected, and no fee rate is set yet — NPCI decides next.
- RuPay debit card — no cap, full protection from charges
- UPI — protection only up to Rs 2,000 per transaction
- Above Rs 2,000 UPI — MDR framework to be set by NPCI steering committee, reports ~40 bps
What happens next
Watch for the NPCI UPI and Services Steering Committee guideline in the next 1-2 weeks. It will define who pays the MDR on high-value UPI — split expected ~40% to issuing banks, rest to TPAPs and acquiring banks.
Why it matters for me
Your kirana, auto and chai UPI up to Rs 2,000 stays free, but bigger UPI bills may soon carry around 0.4% MDR set by NPCI's steering committee.
Daily Life
General Public · Small Merchants
Everyday UPI payments up to Rs 2,000 and all RuPay debit swipes stay free — no extra charge for customer or shopkeeper.
Money
Small Merchants · General Public
UPI payments above Rs 2,000 may soon attract around 0.4% MDR, raising costs for merchants on big-ticket bills.
Work
Banks Fintech
Banks, TPAPs like PhonePe/Paytm and acquiring banks finally get a revenue path on high-value UPI after 5 years of zero MDR.
What to remember
Under Rs 2,000 — free. Above it — charges are coming, rate still to be decided.
Govt: UPI up to Rs 2,000 and all RuPay debit stays free per S.O. 5067(E); MDR on higher UPI payments coming soon via NPCI.
Verified sources (3)
Govt. bars bank charges on payments up to Rs 2,000 via UPI, RuPay-powered debit cards
↗Govt Notifies New Rules, No MDR For UPI Transactions Under Rs 2,000
↗India Sets Rs 2,000 Threshold for MDR-Free UPI Payments
↗Claims and linked sources
6 claimsDepartment of Financial Services issued gazette S.O. 5067(E) on 14 September 2026 under Section 10A, PSSA 2007 specifying charge-free electronic modes.
Only two modes are protected: RuPay-powered debit cards and UPI transactions up to Rs 2,000.
No bank or system provider shall impose, whether directly or indirectly, any charge upon a person making or receiving payment via the specified modes.
The Rs 2,000 cap applies only to UPI; RuPay debit card payments are protected with no amount limit.
The notification does not set an MDR rate; the NPCI-led UPI and Services Steering Committee will decide the MDR framework for UPI above Rs 2,000.
UPI and RuPay debit card payments have been MDR-free since January 2020 to accelerate digital adoption.