The Payments Council of India assures that UPI will remain free for consumers and small merchants, as industry players push for a balanced model to cover rising infrastructure costs amid ongoing fee discussions for larger transactions.
The Payments Council of India has moved to calm fears that the Unified Payments Interface may soon stop being free for ordinary users, saying everyday customers will not be charged transaction fees and that small merchants will not be asked to pay a merchant discount rate for accepting UPI payments. The clarification follows renewed debate over how to fund the long-term cost of running India’s fast-growing digital payments network.
The reassurance came after Finance Minister Nirmala Sitharaman said any proposed MDR would fall on merchants rather than consumers, with the benefits of spending on infrastructure, innovation and security expected to flow to users. The council, which represents non-bank firms in the digital payments ecosystem, said the focus of any fee discussion is limited to larger merchants and higher-value transactions.
That position reflects a wider industry push for a more sustainable payment model. According to reports in The Times of India and The Economic Times, the council has separately written to Prime Minister Narendra Modi seeking the return of a 0.3% MDR on UPI payments for large merchants and a nominal fee on RuPay debit cards. Industry participants have argued that zero-fee acceptance has made it harder to recover the costs of servers, system upgrades, cybersecurity and fraud prevention as UPI volumes continue to expand.
At the same time, the National Payments Corporation of India has already said small merchants should not face MDR, interchange or other charges on RuPay credit card payments of up to ₹2,000 made through UPI. That exemption underscores the policy line the government and payments industry are trying to preserve: keeping low-value, day-to-day digital payments free for consumers and small businesses while debating whether bigger merchants should contribute more to the system’s upkeep.
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