UPI Transactions Above ₹2,000: No Fees for Personal Transfers

Sep 15, 2026

62 min

Sep 15, 2026 14:31

UPI transactions above INR 2000 could be charged but can you still transfer to friends for free?

## Understanding UPI Charges

Unified Payments Interface (UPI) has become a popular choice for quick and easy transactions in India. Recently, there has been confusion about potential charges for transactions over ₹2,000. However, the government has clarified that person-to-person (P2P) transfers will remain free, regardless of the amount.

## Merchant Discount Rate (MDR)

The confusion arose from the introduction of a revised framework for digital payments, which included the Merchant Discount Rate (MDR). This rate applies only to certain merchant transactions above a specified threshold, not to personal transfers.

## Impact on Banks and Payment Providers

Banks and payment service providers may benefit from MDR as a new revenue stream. When merchants accept digital payments, they pay an MDR, which is shared among banks and other entities involved in the transaction process. The MDR ranges from 1% to 3% for credit cards and up to 0.9% for debit cards.

## Financial Sustainability Concerns

A report by the Standing Committee on Finance highlighted concerns about the financial sustainability of the UPI system without MDR. Maintaining the payment infrastructure involves significant costs, including security measures, which account for over 20% of annual expenses. Despite these challenges, users can continue to make payments over ₹2,000 without incurring additional charges.

Read the full story at the source

What you need to know to get Emirates ID?

Leave your details and get a guide as a gift to avoid mistakes

Article contents

LinkedIn X Facebook WhatsApp Telegram