UPI transactions to remain free for citizens, says Indian government

Unified Payments Interface Merchant Discount Rate digital payments Ministry of Finance NPCI

The Government of India has clarified that Unified Payments Interface (UPI) transactions will remain free for citizens, specifically noting that all person-to-person (P2P) transfers will continue to be free of charge. This announcement aims to address public concerns following the Lok Sabha's passage of the Taxation and Other Laws (Amendment) Bill, 2026, which proposes amendments to the Payment and Settlement Systems Act, 2007.

While consumer transactions remain free, the government indicated that a nominal Merchant Discount Rate (MDR) may be introduced for a limited category of merchant transactions that exceed a specific threshold. These potential charges would be significantly lower than the rates currently applied to debit or credit card transactions. The final decision regarding the implementation and rates of any MDR will be made by the UPI and Services Steering Committee, headed by the National Payments Corporation of India (NPCI), once the relevant legislation is passed by Parliament.

The proposed regulatory changes are intended to ensure the long-term sustainability, cybersecurity, and technical resilience of the UPI ecosystem. The government emphasized that the rapid growth of the platform—which processed 2,366 crore transactions worth Rs 29.9 lakh crore in July 2026—requires continuous investment in digital infrastructure and fraud prevention. Additionally, the government stated that relying solely on subsidies is not a viable long-term model for the network's continued expansion.

Entities

Government of India · India · Lok Sabha · Ministry of Finance · National Payments Corporation of India · Nirmala Sitharaman · Unified Payments Interface

Claims

What the coverage asserts, and how many sources carry each claim.

[DISPUTED] UPI processed 2,366 crore transactions totaling Rs 29.9 lakh crore in July 2026. kashmirlife.net · scroll.in · samacharnama.com · bhaskarlive.in · newsvibesofindia.com · +8 more
[● 12 SOURCES] The government rejected claims that external influences were driving the proposed policy changes, calling them unfounded and misleading. kashmirlife.net · bhaskarlive.in · www.newsmobile.in · sambadenglish.com · scroll.in · +6 more
[● 19 SOURCES] The NPCI-headed UPI and Services Steering Committee will decide on the implementation of MDR once the Taxation and Other Laws (Amendment) Bill, 2026, passes Parliament. kashmirlife.net · scroll.in · samacharnama.com · bhaskarlive.in · hindi.business-standard.com · +11 more
[● 15 SOURCES] The proposed amendment to the Payment and Settlement Systems Act is intended to ensure the long-term sustainability, cybersecurity, and technical resilience of the UPI ecosystem. kashmirlife.net · scroll.in · samacharnama.com · bhaskarlive.in · hindi.latestly.com · +8 more
[● 22 SOURCES] If a Merchant Discount Rate (MDR) is introduced, it will apply only to a limited category of merchant transactions above a specific threshold. kashmirlife.net · hindi.webdunia.com · scroll.in · samacharnama.com · www.ibc24.in · +13 more
[● 20 SOURCES] Person-to-person (P2P) UPI transactions will remain free of charge for all users. kashmirlife.net · hindi.webdunia.com · scroll.in · samacharnama.com · www.ibc24.in · +11 more
[● 20 SOURCES] Any future MDR for UPI will be significantly lower than rates charged for debit or credit card transactions. kashmirlife.net · hindi.webdunia.com · scroll.in · samacharnama.com · www.ibc24.in · +12 more
[● 7 SOURCES] The amendment to the Payment and Settlement Systems Act is intended to ensure the long-term sustainability and resilience of the UPI ecosystem. kashmirlife.net · scroll.in · www.aajsamaaj.com · bhaskarlive.in · hindi.latestly.com · +2 more
[● 8 SOURCES] Any future Merchant Discount Rate (MDR) will apply only to a limited category of merchant transactions above a specified threshold. kashmirlife.net · hindi.webdunia.com · scroll.in · www.aajsamaaj.com · bhaskarlive.in · +3 more
[● 17 SOURCES] Person-to-person (P2P) UPI transactions will remain free of charge. kashmirlife.net · hindi.webdunia.com · scroll.in · www.aajsamaaj.com · bhaskarlive.in · +11 more