India’s Finance Ministry assures that new rules under the Unified Payments Interface will not introduce charges for most users, focusing instead on ensuring the system’s sustainability without burdening small transactions or individuals.
India’s Finance Ministry has moved to calm fears that new rules around the Unified Payments Interface will lead to charges for ordinary users, saying person-to-person transfers will remain free and that the change is aimed at protecting the system’s long-term viability rather than taxing everyday payments. In its statement, the ministry said the revised framework does not alter the zero-fee status of UPI transfers between individuals, whatever the amount involved.
The clarification matters because UPI has become the backbone of India’s digital payments boom, and any hint of a charge can quickly unsettle users and merchants. According to the ministry and government releases, payments to merchants up to ₹2,000 will also stay free, while small merchants covered by the zero-MDR framework will continue to face no cost. The ministry said about 96% of person-to-merchant transactions will remain unaffected, with the merchant discount rate applying only to a narrow set of larger transactions.
Industry and official guidance also suggest the changes are tightly circumscribed. Newsonair reported that charges would apply only to merchant payments above ₹2,000, that UPI app providers are barred from adding platform or hidden fees, and that banks have been told merchants must not pass on MDR costs to customers. It also said small merchants receiving up to ₹1 lakh a month through UPI QR codes will continue to enjoy mandatory zero MDR, while essential sectors such as railways, telecoms, insurance, fuel and agriculture inputs will face a flat fee on larger transactions.
The ministry said the framework was drawn up under the Payment and Settlement Systems Act, 2007, after deliberations by the UPI Steering Committee. Officials framed it as a way to support the payments network’s sustainability without imposing new burdens on individuals or smaller businesses. Business Standard reported that only about 4% of merchant UPI transactions may ultimately attract a fee, based on 2025-26 payment data, underscoring how limited the change is expected to be.
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