UPI Payments to Remain Free for Users: Government
Centre says no charges on person-to-person UPI transactions; any future MDR will apply only to select merchant payments.
- Government says UPI users will not pay transaction charges.
- P2P UPI transactions will continue to remain free.
- Any future MDR will apply only to select merchant transactions.
- Amendment aims to ensure UPI’s long-term sustainability and security.
GG News Bureau
New Delhi, 8th Aug: The Central Government has clarified that UPI users will continue to make payments without any transaction charges, dismissing concerns that recent amendments to the Payment and Settlement Systems (PSS) Act would lead to fees on everyday digital payments.
In a statement issued on Saturday, the government said all person-to-person (P2P) UPI transactions will remain free, while any future Merchant Discount Rate (MDR), if introduced, would apply only to a limited category of merchant transactions above a specified threshold at a nominal rate. It added that the vast majority of merchant transactions would also continue to remain free.
The government said the proposed amendment to the PSS Act is an enabling provision aimed at ensuring the long-term sustainability of the UPI ecosystem by supporting investments in cybersecurity, fraud prevention, infrastructure upgrades and technological innovation. It also seeks to encourage greater competition and create a sustainable revenue model for the expanding digital payments ecosystem.
Officials clarified that once Parliament passes the Taxation and Other Laws (Amendment) Bill, 2026, the NPCI-led UPI and Services Steering Committee will determine whether any MDR should be introduced and, if so, its scope and rate.
Rejecting reports suggesting external influence behind the policy changes, the government described such claims as “false and misleading”. It said India launched UPI in 2016 and made it free for citizens and merchants from January 2020, demonstrating its commitment to promoting a robust domestic digital payments ecosystem.
Highlighting UPI’s growth, the government said the platform processed 2,366 crore transactions worth ₹29.9 lakh crore in July 2026 and is now operational in 11 countries, making it the world’s largest real-time payment system.
Reaffirming its commitment, the Centre urged citizens to rely only on official information issued by the Ministry of Finance, the Reserve Bank of India and NPCI regarding UPI-related developments.
