India’s finance ministry clarifies that the Unified Payments Interface (UPI) will continue to be free for individual users, dismissing concerns over potential charges for person-to-person transfers and emphasising targeted, nominal fees for certain high-value merchant transactions in future reforms.
India’s finance ministry has sought to cool speculation that UPI payments may soon carry a charge for ordinary users, saying the system will remain free for consumers. Any future merchant discount rate, or MDR, would apply only to a narrow set of high-value merchant payments and would be set at a nominal level, the ministry said, while stressing that person-to-person transfers will continue at no cost.
The clarification comes after questions over a recent amendment to the Payment and Settlement Systems Act, 2007, which had prompted concern that fees could be introduced across the UPI network. According to the ministry, the change is intended as an enabling measure to support the long-term resilience, technical development and security of the system rather than a move to impose broad charges on users.
Officials said the aim is to sustain investment in cybersecurity, fraud prevention and infrastructure as transaction volumes keep rising. In July 2026 alone, UPI processed 2,366 crore transactions worth Rs 29.9 lakh crore, the ministry said. It also argued that a more durable revenue model could help more firms expand within the ecosystem and reduce reliance on subsidies.
The government said any decision on MDR, if it is ever introduced, would rest with the UPI and Services Steering Committee headed by the National Payments Corporation of India once Parliament passes the Taxation and Other Laws (Amendment) Bill, 2026. UPI is now live in 11 countries, and the government rejected suggestions that outside influence was driving the policy shift, calling such claims unfounded and misleading. Earlier statements from the National Payments Corporation of India and the Press Information Bureau have also said bank account-based UPI transfers remain free and that claims about GST on UPI payments were baseless. International Monetary Fund analysis has described UPI as the world’s largest real-time payment system, underscoring the scale of the platform the government is now seeking to protect and expand.
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