The Indian government clarifies that charges on the Unified Payments Interface (UPI) will be limited, maintaining its zero-cost model for consumers and most merchants, as policy debates continue.
The Ministry of Finance has moved to calm mounting speculation around Unified Payments Interface charges, saying consumers will not be asked to pay for sending money through the payments platform. In a statement issued on Saturday, the ministry said person-to-person transfers will remain free, while any merchant discount rate, or MDR, would apply only to a narrow set of merchant transactions above a threshold and at a nominal level far below the charges typically associated with debit or credit cards.
The clarification is aimed at preserving the zero-cost character that has defined UPI since its rapid expansion across India’s payments system. The ministry said most merchant transactions will continue to carry no charge at all, and stressed that any MDR, if introduced, would be threshold-based rather than imposed across the board. It also said the “UPI and Services Steering Committee”, led by the National Payments Corporation of India, would determine the structure of any MDR only after Parliament passes the Taxation and Other Laws (Amendment) Bill, 2026, which would amend Section 10A of the Payment and Settlement Systems Act, 2007.
Officials also pushed back strongly against media reports suggesting outside pressure was driving a change in policy. The ministry called those claims false and misleading, arguing that such influence would not have produced a payments system launched in 2016 and made free for merchants and consumers from January 2020. The statement framed UPI as a central part of India’s digital public infrastructure and said it has become the world’s largest real-time interoperable payment system.
The latest clarification is consistent with earlier government responses on the same issue. Reporting by Indian Express and other outlets has previously noted that the finance ministry said there was no proposal to levy transaction fees on UPI payments, while tax and policy commentary has pointed out that government support has helped sustain the zero-charge model through incentive payments to ecosystem partners. As debate over the long-term economics of UPI continues, the government is signalling that any future change would be limited, targeted and subject to further legislative and committee-level scrutiny.
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