A concern spread quickly across social platforms this week over claims that Unified Payments Interface (UPI) transactions exceeding ₹3,000 would soon bear charges. UPI is an integral part of daily life for millions of Indians, so the new policy has caused confusion and led to controversy.
“So, is it true that you’ll be charged for sending more than ₹3,000 via UPI?”
“The Short Answer: No, You Will Not Be Charged”
As of now, there is no charge for peer-to-peer (P2P) UPI transfers, even if the transaction exceeds ₹3,000. The National Payments Corporation of India (NPCI), which manages UPI operations, has not issued any directive setting charges on standard user-to-user transfers.
The Reserve Bank of India (RBI) and the Ministry of Finance have also repeated that UPI services remain free for users, supporting the government’s commitment to promoting digital payments.
Where Did the Confusion Begin?
The rumours likely arise from ongoing discussions and regulatory announcements concerning interchange fees on merchant payments and high-value transactions using prepaid instruments (PPIs) like wallets or prepaid cards linked with UPI.
In April 2023, the NPCI introduced an interchange fee of up to 1.1% on merchant transactions above ₹2,000 made via PPIs, not standard bank-to-bank UPI transfers. The fee applied only to merchants and not individual users.
This difference between merchant payments and personal transfers has been misunderstood in several social media posts, leading to the incorrect assumption that all UPI payments over ₹3,000 would incur a fee.
What Are Interchange Fees and Do They Affect You?
Interchange fees are charges that apply when merchants accept payments through digital platforms. These fees are typically paid by the merchant or the payment service provider, not the end consumer.
If you’re transferring money to a friend, paying your landlord, or splitting bills with family via apps like PhonePe, Google Pay, Paytm, or BHIM, you are not affected.
However, if you’re a merchant using wallets or PPIs for accepting UPI payments above ₹2,000, certain fees may apply based on the payment provider’s structure.
UPI Remains Free and Government-Supported
India’s digital payments have been a model of innovation and scalability, largely because of UPI’s free and smooth nature. The government has continuously supported UPI infrastructure costs for banks and fintech companies to maintain this accessibility.
Earlier in 2023, Finance Minister Nirmala Sitharaman clarified in the Union Budget session that “UPI is a digital public good” and will continue to be free for consumers.
Main Points
- No charges for sending over ₹3,000 via UPI for personal use
- Charges apply only in selected merchant transactions using wallets
- No official NPCI or RBI circular introduces charges for standard UPI users
- Always verify financial updates from credible sources
For now, you can continue using UPI for everyday payments without worrying about crossing any ₹3,000 threshold. The platform remains one of the most consumer-friendly inventions in India’s digital revolution.
