# UPI Stays Free for Users, MDR Only on Select Merchant Deals

2026-08-09T05:38:31+00:00 | Governance | Indian Opinion Desk

Corroboration: 1 independent outlet

The government has clarified that UPI transactions will remain free for users, with any future merchant discount rate (MDR) applying only to a limited set of high-value merchant payments above a certain threshold. The Ministry of Finance said person-to-person transfers would continue to be charge-free, and any MDR levied would be at a nominal rate lower than debit or credit card MDRs. The clarification follows the Lok Sabha passing the Taxation and Other Laws (Amendment) Bill, 2026, which amends the Payment and Settlement Systems Act, 2007. The government called the change an enabling provision, not an immediate imposition of charges. Any MDR will be decided by the UPI and Services Steering Committee headed by NPCI. UPI processed 2,366 crore transactions worth Rs 29.9 lakh crore in July 2026 alone.

## Coverage

- timesnownews.com <https://www.timesnownews.com/business-economy/personal-finance/upi-remains-free-for-users-mdr-to-apply-only-on-limited-transactions-finmin-article-155388745>
- thefederal.com <https://thefederal.com/category/business/upi-transactions-to-remain-free-for-users-fee-only-on-select-merchant-deals-govt-252972>
- inc42.com <https://inc42.com/features/upis-free-ride-is-over/>

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