PNB UPI Rules: Nowadays, most people use UPI to send money and make payments at shops. Consequently, many questions arise regarding charges and new rules associated with UPI. Punjab National Bank (PNB) and the National Payments Corporation of India (NPCI) have introduced new guidelines that distinguish between ‘person-to-person’ (P2P) payments and payments made to merchants (person-to-merchant). It is important to note that the rules regarding charges differ for these two types of transactions. Let’s break this down in simple terms to understand who might incur charges on UPI payments and which users should take note.
What are the PNB and NPCI UPI rules?
If you use your bank account to send money to a friend, relative, or family member via UPI, there are no transaction charges. This applies regardless of the amount being transferred—whether the sum is small or large, person-to-person payments remain free.
There is also significant relief for small shopkeepers and merchants. Small merchants who receive up to ₹1 lakh per month via UPI QR codes are not required to pay a Merchant Discount Rate (MDR). This ensures that small business owners are not burdened with additional costs.
However, for person-to-merchant transactions exceeding ₹2,000, an MDR of 0.4% is applicable. A ‘person-to-merchant’ transaction occurs when a customer pays a shop or a merchant using UPI. For transactions of ₹75,000 or more, the MDR is capped at a maximum of ₹300.
The merchant discount rate is paid by the merchants integrated into the payment system. The government has clarified that this charge will not be levied on customers. In such a scenario, ordinary users are not required to pay any extra charges—under the guise of an MDR (Merchant Discount Rate)—when making payments via UPI.
The MDR rule will not be implemented until Diwali.
The NPCI has decided to defer the implementation of the Merchant Discount Rate (MDR) on ‘person-to-merchant’ (P2M) transactions, aiming to encourage shopping and digital payments during the festive season. While these charges were originally scheduled to take effect from October 15, the NPCI announced on October 13 that the implementation has been postponed due to Diwali. A new date for the implementation of this rule will be announced after November 8.
What is important for UPI users to know?
For the general public using UPI, it is important to note that person-to-person (P2P) money transfers will remain completely free. Small merchants will also be granted an exemption up to a certain limit; however, for payments exceeding ₹2,000, merchants will be required to pay an MDR charge. This charge will not be levied on or collected from the customers.