PhonePe CEO assures UPI will stay free for consumers after bill stirs fee fears

The Story in Brief

PhonePe CEO Sameer Nigam has assured users that UPI payments will remain free for consumers, pushing back against speculation after the Lok Sabha passed the Taxation and Other Laws (Amendment) Bill, 2026. The bill enables the government to introduce merchant discount rates (MDR) on select business UPI transactions for the first time since January 2020, when charges were waived to boost digital payments.

The Payments Council of India clarified that small merchants, including kirana stores, will remain protected from any MDR, and the charges, if implemented, would only apply to large merchants as a commercial arrangement between them and payment service providers. Finance Minister Nirmala Sitharaman, RBI Governor Sanjay Malhotra, and fintech leaders like Razorpay CEO Harshil Mathur and Pine Labs CEO Amrish Rau have echoed that consumers will not be charged. Rau noted that the zero-MDR regime had slowed ecosystem growth, with infrastructure costs jumping nearly 300% in the last two years.