UPI To Remain Free For Users, But Some Merchants May Face Nominal Fees In Future: Govt

The Government of India has clarified that users will not have to pay transaction charges for UPI payments, while a nominal Merchant Discount Rate (MDR) could be introduced for a limited set of merchant transactions in the future. The clarification came a day after the Lok Sabha passed a Bill amending the Payment and Settlement Systems Act, 2007, enabling charges on UPI and other notified electronic payments. The Finance Ministry said Person-to-Person transactions will remain free, while most merchant transactions will also continue without charges. Any future MDR would be threshold-based, nominal and lower than card transaction rates. The government said the amendment aims to support UPI’s long-term sustainability, cybersecurity, infrastructure and innovation. It also rejected claims of external influence, calling them unfounded, false and misleading.