Now Reading: UPI stays free for users; limited merchant fees possible
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UPI stays free for users; limited merchant fees possible
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…
The Story in Brief
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.
The Indian Opinion
The panic over UPI charges was overblown: the government has made clear that ordinary users and small merchants will not pay. Equally, claims of external pressure lack evidence, UPI's free model was a sovereign choice. The real test lies ahead: the threshold and rate that NPCI's committee sets will decide if UPI remains truly affordable. Will it protect the kirana store as much as the consumer?
Sources (3): hindustantimes.com, timesofindia.indiatimes.com, livemint.com
This story was synthesised by AI from the 3 sources linked above.
Updated: this story now draws on 3 sources.
