NEW DELHI, Sep 15 (TIWN): In a significant relief for millions of digital payment users, the Government of India has announced that banks and payment-system providers cannot levy charges on UPI transactions of up to ?2,000.

The move is aimed at protecting the affordability of small-value digital payments and encouraging wider use of cashless transactions across the country. UPI has become one of India's most widely used payment systems, particularly for everyday purchases such as groceries, transport, food and other small expenses.

Under the government’s latest clarification, eligible UPI transactions up to 2,000 rupees will remain free from direct or indirect charges imposed by banks or payment-system providers. This means customers should not be asked to pay an additional transaction fee simply for making a qualifying UPI payment.

The government has also maintained similar protection for eligible RuPay debit-card transactions up to Rs. 2,000.

However, users should note that the announcement does not necessarily mean that every UPI transaction above Rs. 2,000 will now attract a fee. Higher-value transactions may be subject to a different framework, and any applicable charges would depend on the rules and arrangements governing those transactions.

The decision is particularly important for small merchants and consumers, for whom even a modest transaction fee could increase the cost of routine digital payments. Keeping low-value UPI transactions free is also expected to support India's broader push towards digital payments and financial inclusion.