In order to further promote digital and card payments, Department of Financial Services, Ministry of Finance issues direction in public interest all Public Sector Banks(PSBs) not to charge fees for transactions settled on Immediate Payment Service (IMPS) and Unified Payments Interface (UPI) in excess of rates charged for National Electronic Funds Transfer (NEFT) for transactions above ₹ 1000/-, with service tax being charged at actual;

For Unstructured Supplementary Service Data (USSD) transactions above ₹ 1000/-, a further discount of Fifty (50) Paise on these rates shall apply.

In line with the Central Government’s objective of promotion of payments through cards and digital means over payments in cash, the Reserve Bank of India (RBI) has recently rationalized customer charges for transactions up to ₹ 1000/- settled on Immediate Payment Service (IMPS), Unified Payments Interface (UPI) and Unstructured Supplementary Service Data (USSD) with effect from 01.01.2017 till 31.03.2017. RBI has also rationalized the Merchant Discount Rate (MDR) for debit card transactions up to ₹ 2000/- with effect from 01.01.2017 till 31.03.2017.

In order to further promote digital and card payments, the Department of Financial Services (DFS), Ministry of Finance has issued a direction in public interest to all Public Sector Banks(PSBs), in accordance with which these banks shall not charge fees for transactions settled on Immediate Payment Service (IMPS) and Unified Payments Interface (UPI) in excess of rates charged for National Electronic Funds Transfer (NEFT) for transactions above ₹ 1000/-, with service tax being charged at actuals. For Unstructured Supplementary Service Data (USSD) transactions above ₹ 1000/-, a further discount of fifty paise on these rates shall apply.

This direction shall apply for all transactions up to 31.03.2017.

Digital payments fee cap: PSBs barred from charging IMPS and UPI fees above NEFT rates, service tax actuals. The Department of Financial Services directs Public Sector Banks that PSBs shall not charge fees for transactions settled on Immediate Payment Service (IMPS) and Unified Payments Interface (UPI) in excess of rates charged for National Electronic Funds Transfer (NEFT) for transactions above the specified threshold, with service tax charged at actuals; for Unstructured Supplementary Service Data (USSD) transactions above the threshold, a further discount of fifty paise on these rates shall apply, and the direction is temporally limited.