# Govt says UPI to stay free for users, MDR only for select big merchants

2026-08-10T12:02:52+00:00 | Governance | Indian Opinion Desk

Corroboration: 1 independent outlet

The finance ministry has clarified that consumers will not pay any transaction charges for using UPI. Any future Merchant Discount Rate (MDR), if introduced, would apply only to a limited set of large merchants above a certain threshold and at a nominal rate lower than current debit or credit card MDRs. All person-to-person UPI transfers will remain completely free. The clarification follows the introduction of the Taxation and Other Laws (Amendment) Bill, 2026, which amends the Payment and Settlement Systems Act, 2007. The ministry said the amendment is an enabling provision that allows the NPCI-led steering committee to decide on an MDR framework if needed. It denied external pressure drove the change, noting UPI is India’s home-grown system that processed over 2,300 crore transactions worth nearly ₹30 lakh crore in July 2026 alone.

## Coverage

- medianama.com <https://www.medianama.com/2026/08/223-upi-mdr-charges-users-finance-ministry/>
- livemint.com <https://www.livemint.com/money/personal-finance/will-you-be-charged-for-upi-peer-transfers-and-grocery-payments-mygovindia-busts-myths-heres-what-stays-free-11786354246063.html>

Tags: digital payments, Finance Ministry, MDR, merchants, NPCI, UPI
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