India’s government assures consumers that the widely used Unified Payments Interface (UPI) will remain free for person-to-person transactions, while proposing limited, threshold-based merchant charges to sustain the platform’s growth and security.
India’s government has said consumers will not be charged for using the Unified Payments Interface, easing concerns that fees could be introduced for the country’s most widely used digital payment system. According to the clarification, any future merchant discount rate, or MDR, would apply only to a narrow set of merchant transactions and at a nominal level.
The statement follows a proposed amendment to Section 10A of the Payment and Settlement Systems Act, 2007, through the Taxation and Other Laws (Amendment) Bill, 2026. The government said the change is meant to create an enabling framework rather than impose blanket charges, and it stressed that person-to-person transfers will remain free.
Officials also said most merchant payments would continue without charges. If an MDR is introduced, the government said it would be threshold-based rather than applied across all merchant transactions. The UPI and Services Steering Committee, chaired by the National Payments Corporation of India, would decide the framework after Parliament passes the legislation.
The government framed the move as part of a longer-term plan to keep UPI sustainable while funding cybersecurity, fraud prevention and payments infrastructure. That comes as the platform continues to expand rapidly. Government data cited in the announcement showed UPI processed 2,366 crore transactions worth Rs 29.9 lakh crore in July 2026, while separate data released in Parliament indicated it handled Rs 314.23 lakh crore in financial year 2025-26. The user base had reached 55.49 crore by June 2026, underscoring its central role in India’s digital payments market.
UPI, launched in 2016, is now operational in 11 countries. The government advised users to rely on the finance ministry, the Reserve Bank of India and NPCI for any future updates on charges.
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