India’s finance ministry clarifies that its flagship digital payments system will remain free for most users, despite recent rumours of potential merchant transaction fees, as the platform continues to expand rapidly and secure long-term resilience.
India’s finance ministry has sought to cool speculation that the Unified Payments Interface will start carrying charges for ordinary users, saying the country’s flagship digital payments system will remain free for person-to-person transfers and for most merchant payments. In a statement dated August 8, 2026, the ministry said any merchant discount rate, or MDR, would be limited to a narrow set of higher-value merchant transactions and would be set at a nominal level well below card charges. Reuters-style reporting in Indian outlets said the clarification followed fresh concern that amendments to the Payment and Settlement Systems Act could pave the way for fees on everyday UPI use.
The government said the legal change is meant to support UPI’s long-term resilience, not to burden consumers. As transaction volumes have surged, officials argued that the system needs continued spending on cybersecurity, fraud controls, infrastructure and technical upgrades. The ministry said a revenue model that can sustain competition among payment providers will be necessary if UPI is to keep expanding without relying only on subsidies.
Official data released by the ministry shows the scale of the platform has continued to grow quickly. By June 2026, UPI had onboarded 55.49 crore users. In financial year 2025-26, it processed 24,161.69 crore transactions worth ₹314.23 lakh crore, underscoring how deeply the system has become embedded in daily commerce. The government, the Reserve Bank of India and the National Payments Corporation of India have also introduced risk-based transaction limits and safeguards against unauthorised mobile number changes to improve security and transparency.
The latest clarification also fits a broader pattern of pushback from New Delhi whenever fee rumours surface around UPI. In June, the finance ministry rejected reports that charges were being planned, while business media including Business Standard and The Indian Express reported that officials had reiterated there was no current proposal to levy transaction fees on users. At the same time, a separate report by Justlast said officials were weighing a possible MDR for large merchants above a turnover threshold, though small businesses and peer-to-peer transfers would remain exempt.
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