# No UPI charge for consumers, small merchants: Payments Council 2026-08-07T19:53:34+00:00 | Governance | Indian Opinion Desk Corroboration: 1 independent outlet Consumers and small merchants will not have to pay any charge for using UPI, the Payments Council of India has said. The clarification came after the Lok Sabha passed a Bill amending the Payment and Settlement Systems Act, 2007, enabling the government to allow banks and payment firms to levy a Merchant Discount Rate (MDR) on UPI and other electronic payments. The government is expected to permit MDR of 0.25 per cent to 0.4 per cent on transactions above Rs 2,000 made only to businesses. Routine purchases like milk, vegetables, and auto fares are likely to stay exempt. Finance Minister Nirmala Sitharaman said the MDR will apply to merchants, not consumers, and will help banks invest in security and innovation. The Payments Council said service charges, where applicable, are commercial deals between merchants and payment providers and do not mean consumers pay. The Hindu reported that sources expect the charge to apply only to merchants with annual turnover over Rs 1 crore-Rs 1.5 crore, covering only about 5 per cent of UPI transactions. Critics fear merchants may pass the cost to consumers, pushing them back to cash. ## Coverage - timesofindia.indiatimes.com - ndtv.com - thehindu.com - timesnownews.com - timesnownews.com Tags: digital payments, MDR, NPCI, Payment and Settlement Systems Act, UPI Canonical: https://indianopinion.org/upi-to-stay-free-for-consumers-and-small-merchants-payments-council/ License: Summary and commentary (c) Indian Opinion, reusable with attribution. Facts belong to the linked sources. Cite: https://indianopinion.org/upi-to-stay-free-for-consumers-and-small-merchants-payments-council/#story-in-brief Review state: restored archive article, accurate at time of publication, not offered to search indexes.