UPI Charges Clarified By Centre For Users And Most Businesses
The Centre has clarified that UPI payments will remain free for individual users and most businesses while limited charges may apply only to certain high value merchant transactions.
The government has moved to address concerns over possible charges on UPI transactions, making it clear that ordinary users will not have to pay any fee for personal UPI payments. Most merchants will also continue to use the digital payment system without additional charges.
According to the Finance Ministry, any Merchant Discount Rate charges, if introduced, would be restricted to selected business transactions crossing a specified threshold. The charges would not be imposed across all merchants.
The clarification came in a statement issued by the Finance Ministry on August 8. It said that personal UPI transactions would continue to remain free, while only certain merchant transactions could come under a nominal MDR structure.
The ministry also pointed out that such charges, if applicable, could be lower than the MDR generally associated with debit and credit card transactions. A large share of UPI transactions by merchants is expected to remain free.
A final decision on whether MDR should be introduced will be taken by the UPI and Services Steering Committee under the National Payments Corporation of India. If such a system is approved, the committee will decide how it will be implemented and communicate the details.
The government said a financially sustainable UPI ecosystem is important as India prepares for the next phase of digital payments. A stronger system would help UPI expand further, including into rural areas, while maintaining affordability and competition.
The proposed changes to the Payments and Settlement Systems framework are also aimed at keeping UPI secure, affordable and inclusive while supporting its growing international presence.
UPI was launched in 2016 and has since become a major part of India’s digital payment ecosystem. In July 2026 alone, UPI processed transactions worth around Rs 29.9 lakh crore. The payment platform is currently operational in 11 countries, with more nations showing interest in adopting or partnering with the system.
