The Indian government reassures that the Unified Payments Interface will stay free for consumers, even as it considers introducing nominal charges for certain merchant transactions, amid legislative changes to ensure sustainable growth of the digital payments ecosystem.
India’s government has moved to calm fears that Unified Payments Interface users will be charged for everyday transactions, saying the system will remain free for consumers and for most merchant payments even as it considers a limited fee structure for some business transactions. The clarification follows parliamentary approval of a bill to amend the Payment and Settlement Systems Act, a change that would allow charges on UPI and other notified digital payment modes in certain cases.
According to the finance ministry, any merchant discount rate, or MDR, would be narrow in scope, linked to a restricted class of merchant payments above a set threshold and set at a nominal level far below the fees usually associated with debit or credit cards. The ministry said the eventual rate and threshold have not yet been fixed and would be decided by the UPI and Services Steering Committee, which is headed by the National Payments Corporation of India, once the wider legislative process is complete.
The government has framed the proposal as part of an effort to keep India’s digital payments infrastructure financially sustainable while still encouraging further growth in rural and semi-urban areas. That message builds on earlier assurances: in October 2025, Reserve Bank of India Governor Sanjay Malhotra said there was no proposal to levy charges on UPI transactions, and in June 2025 the finance ministry dismissed reports of user fees as false and misleading, underscoring its commitment to keeping consumer payments free.
The debate matters because UPI has become central to India’s payments system. Government figures cited this month put July 2026 volumes at 2,366 crore transactions worth Rs 29.9 lakh crore, while the network is now live in 11 foreign countries. Industry explainers also note that standard bank-to-bank UPI transfers remain free for users, although merchants can face charges in some linked products, such as credit card or wallet-based transactions, and may also pay platform fees to payment processors.
Officials have urged the public to rely only on statements from the finance ministry, the Reserve Bank of India and NPCI, warning against forwarding unverified messages as speculation swirls around the future of UPI pricing. For now, the government’s line is clear: consumers should not expect routine UPI payments to become chargeable, even if a narrowly targeted merchant fee is eventually introduced.
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