UPI Payments to Remain Free for Consumers, Government Clarifies

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UPI payments will remain free for consumers, according to the Finance Ministry.
All Person-to-Person (P2P) transactions will continue without charges.
Most merchant transactions will also remain free.

NEW DELHI: The government has clarified that UPI transactions will remain free for consumers, addressing concerns over the possibility of charges being introduced on digital payments. The Finance Ministry said consumers will not have to pay transaction fees while making payments through UPI.

The clarification comes as the government looks to strengthen the long-term sustainability and technological infrastructure of India’s rapidly expanding digital payments ecosystem.

Person-to-Person UPI Payments Will Remain Free

According to the Finance Ministry, all Person-to-Person transactions through UPI will continue to be free of charge.

This means consumers transferring money to family members, friends or other individuals through UPI will not face transaction charges.

The ministry also said that the vast majority of merchant transactions will continue to remain free.

Limited MDR Could Apply to Some Merchant Transactions

The government said that if Merchant Discount Rate (MDR) charges are introduced, they would apply only to a limited category of merchant transactions.

Such charges would be applicable only above a specified transaction threshold and at a nominal rate, according to the Finance Ministry.

The clarification indicates that the government does not intend to impose a broad-based charge on everyday UPI payments made by consumers.

Why the Government Is Amending Payment Rules

The Finance Ministry said the amendment to the Payment and Settlement Systems Act is an enabling provision intended to support the long-term sustainability of UPI.

The government highlighted the need for continued investment in:

Cybersecurity
Fraud prevention
Payment technology
Digital infrastructure
System resilience

As UPI transaction volumes continue to rise, the government said strengthening the underlying infrastructure will be essential to protect the system against emerging risks.

UPI Processes ₹29.9 Lakh Crore in One Month

The Finance Ministry highlighted UPI’s growing role in India’s digital economy.

The platform processed around 2,366 crore transactions worth ₹29.9 lakh crore in the latest month cited by the government.

UPI has also expanded beyond India and is now available in 11 foreign countries, further strengthening its position as an important component of India’s digital payment infrastructure.