Finance Minister Nirmala Sitharaman has reassured that the government has not finalised any merchant discount rate framework for UPI transactions, amid ongoing discussions and speculation about potential charges.
Finance Minister Nirmala Sitharaman has sought to calm speculation that Unified Payments Interface users could soon face a charge, saying the government has not settled any merchant discount rate framework and that the latest legislative change does not itself add a fee. Speaking in Parliament, she said the amendment to the Payment and Settlement Systems Act is only an enabling provision and “does not impose any tax or transaction charge on UPI users”.
The clarification came as the Rajya Sabha approved the Taxation and Other Laws (Amendment) Bill, 2026 by voice vote, sending it back to the Lok Sabha. According to the government’s explanation, the revised law would simply give ministers the power to notify which electronic payment methods remain protected from charges, rather than automatically introducing any levy on UPI transactions.
For now, any discussion of MDR remains at a preliminary stage. Sitharaman said no framework has been finalised, while the UPI and Services Steering Committee, chaired by the National Payments Corporation of India, is expected to examine whether such a charge should exist at all, and if so, how limited it should be. Officials have indicated that person-to-person transfers would stay outside any proposed charge and that any future regime would be confined to a narrow band of merchant payments.
The debate is not new. Business Standard reported that fintech firms have pressed Sitharaman to consider MDR on UPI payments, arguing that they need a revenue model for processing such transactions. At the same time, the government has repeatedly pushed back against claims that UPI users will be charged, with previous statements in 2020 making clear that RuPay and UPI payments would not attract MDR and with later ministry clarifications rejecting suggestions that GST would be levied directly on UPI transactions.
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