In a clear and categorical statement, the Ministry of Finance today put to rest all speculation around charges on the Unified Payments Interface (UPI).
“No charges for users. Consumers making payments will not face any transaction charges,” the government declared. All Person-to-Person (P2P) transactions will continue to remain free, and the vast majority of merchant transactions will also stay free of charge.
The clarification comes after the proposed amendment to Section 10A of the Payment and Settlement Systems Act, 2007, through the Taxation and Other Laws (Amendment) Bill, 2026. Some sections of the media and social media had misinterpreted the enabling provision as a move to impose fees on ordinary users.
The government has firmly rejected such narratives. “This is completely false and misleading,” the statement said, adding that if external pressure had been a factor, India would never have launched UPI in 2016 or kept it free for both citizens and merchants since January 2020.
Instead, the amendment is designed to ensure UPI’s long-term sustainability. With transaction volumes exploding — UPI processed a staggering 2,366 crore transactions worth ₹29.9 lakh crore in July 2026 alone — the system needs continuous investment in cybersecurity, fraud prevention, and infrastructure. A purely subsidy-driven model is no longer viable for the next phase of growth, especially as UPI expands deeper into rural and semi-urban India and goes live in 11 foreign countries.
Any Merchant Discount Rate (MDR), if introduced in future, will be decided by the UPI and Services Steering Committee headed by NPCI. It will apply only to a limited set of high-value merchant transactions above a certain threshold, and at a nominal rate far lower than debit or credit card MDRs. Everyday transactions for both citizens and the vast majority of merchants will remain free.
“UPI is India’s own innovation, and the government remains committed to keeping it free for citizens while ensuring its sustainability for decades to come,” the Ministry affirmed.
