Now Reading: UPI stays free for consumers, nominal MDR for big merchants only
-
01
UPI stays free for consumers, nominal MDR for big merchants only
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…
The Story in Brief
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.
The Indian Opinion
The panic over UPI charges was predictable but overblown. Many users instantly assumed they would be billed for every tap. The government has now made it plain that the enabling amendment is about long-term sustainability, not a tax on digital payments. The claim that foreign pressure drove the change is also baseless: UPI was built and made free by India. The real test will be the threshold the NPCI committee sets. If it is set high enough, most merchants will not feel the MDR at all. Will the committee keep it above Rs 2,000 as reports suggest? That number will settle the debate.
Sources (4): inc42.com, siasat.com, timesnownews.com, businesstoday.in
This story was synthesised by AI from the 4 sources linked above.
Updated: this story now draws on 4 sources.
