# UPI stays free for consumers, nominal MDR for big merchants only

2026-08-08T17:52:18+00:00 | Governance | Indian Opinion Desk

Corroboration: 1 independent outlet

The finance ministry has categorically ruled out any UPI charges for consumers, saying person-to-person payments will remain free and small merchants will be protected. The clarification on August 8 came after the Lok Sabha passed a Bill amending the Payment and Settlement Systems Act, 2007, enabling the government to prescribe a Merchant Discount Rate (MDR) for certain electronic transactions. The ministry said any future MDR would apply only to a limited set of merchant transactions above an unspecified threshold, at a nominal rate far lower than card MDRs. The decision will be taken by the NPCI-headed UPI and Services Steering Committee after Parliament passes the Bill. Official data shows UPI processed 2,366 crore transactions worth Rs 29.9 lakh crore in July 2026 alone.

## Coverage

- inc42.com <https://inc42.com/buzz/payments-council-rules-out-consumer-mdr-phonepe-razorpay-back-free-upi/>
- siasat.com <https://www.siasat.com/no-upi-charges-for-users-most-merchant-payments-free-too-govt-3521241/>
- timesnownews.com <https://www.timesnownews.com/business-economy/upi-transactions-to-remain-free-merchants-may-face-small-fee-centre-clarifies-article-155387206>
- businesstoday.in <https://www.businesstoday.in/india/story/no-your-upi-transactions-arent-getting-charged-government-refutes-fee-rumors-claims-548149-2026-08-08?utm_source=rssfeed>

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