# UPI stays free for users; limited merchant fees possible

2026-08-08T15:21:22+00:00 | Governance | Indian Opinion Desk

Corroboration: 1 independent outlet

The government clarified on Saturday that UPI transactions will remain free for users, with no charges on person-to-person payments. It said the overwhelming majority of merchant transactions will also be free. Any merchant discount rate (MDR) will apply only to limited merchant transactions above a threshold, at a nominal rate far lower than card MDRs. The clarification follows the passage of the Taxation and Other Laws (Amendment) Bill, 2026, which enables MDR on select digital payments. The government dismissed reports of external pressure as false. The NPCI-headed UPI and Services Steering Committee will decide on any MDR after the Bill becomes law. In July 2026, UPI processed 2,366 crore transactions worth Rs 29.9 lakh crore.

## Coverage

- hindustantimes.com <https://www.hindustantimes.com/india-news/consumers-making-payments-via-upi-will-not-face-any-transaction-charges-government-clarifies-101786196270399.html>
- timesofindia.indiatimes.com <https://timesofindia.indiatimes.com/business/india-business/no-charges-for-upi-users-government-clarifies-person-to-person-transactions-to-remain-free-top-points/articleshow/133054004.cms>
- livemint.com <https://www.livemint.com/money/personal-finance/upi-mdr-who-will-pay-who-won-t-and-what-the-new-rules-mean-government-clarifies-11786196684360.html>

Tags: digital payments, Finance Ministry, MDR, NPCI, Payment and Settlement Systems Act, UPI
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