Now Reading: Govt says UPI to stay free for users, MDR only for select big merchants
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Govt says UPI to stay free for users, MDR only for select big merchants
Govt says UPI to stay free for users, MDR only for select big merchants
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…
The Story in Brief
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.
The Indian Opinion
Those viral forwards claiming UPI will soon cost you are a classic example of panic over policy nuance. The government has quite clearly said any future merchant discount rate will apply only to large retailers, not to you sending money to a friend or buying vegetables. The real story is about making UPI sustainable, not about killing the goose that laid the golden digital egg. Watch whether the steering committee actually sets an MDR above zero. That number will tell us if this is genuine reform or a backdoor charge.
Sources (2): medianama.com, livemint.com
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
