India’s finance minister, Nirmala Sitharaman, has challenged claims that recent changes to payment laws could lead to charges on UPI transactions, emphasising that users will not face fees, as debate over merchant discount rates continues.
India’s finance minister, Nirmala Sitharaman, has pushed back against a claim by senior Congress politician Jairam Ramesh that changes to payment law could open the door to charges on UPI transactions, calling the allegation misleading and saying ordinary users will not be asked to pay fees.
The dispute centres on the Taxation and Other Laws (Amendment) Bill, 2026, and whether it could alter the future of the merchant discount rate, or MDR, which is the fee typically paid by merchants to payment processors. According to the government, any such charge would, if ever introduced, apply to merchants rather than consumers, and no final decision on MDR for UPI has been taken.
Sitharaman said on X that the Congress leader should have checked the details before raising alarm. She argued that MDR is a merchant-side cost and said any future system would help banks and fintech firms invest further in infrastructure, innovation and security. Reuters-style reporting on the issue has noted that the bill proposes changes to Section 10A of the Payment and Settlement Systems Act, 2007, but does not itself amount to a decision to charge UPI users.
Ramesh, however, has warned that removing the present legal protection could eventually make fee-free UPI payments vulnerable to charges. He also questioned whether the Reserve Bank of India needs to rely on MDR to support digital payments, pointing to the central bank’s large surplus transfer to the Union government. The Economic Times has separately reported that the government continues to say it is committed to keeping UPI free for users, while official and banking materials indicate that MDR can still apply in some limited merchant categories, including certain RuPay credit card payments accepted through UPI from June 1, 2026.
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