New Delhi, August 8, 2026 (Yes Punjab News)
The government on Saturday clarified that consumers will continue to make Unified Payments Interface (UPI) transactions without any charges, while a limited merchant discount rate (MDR) could be introduced for certain high-value merchant transactions.
The Finance Ministry said all person-to-person (P2P) UPI transactions would remain free and there would be no blanket MDR imposed on merchants.
“If introduced, MDR charges will apply only to a limited set of merchant transactions above a certain threshold and at a nominal rate,” the ministry said, adding that any such charge would be significantly lower than the MDR applicable to debit and credit card transactions.
The clarification comes amid concerns over proposed amendments to the Payment and Settlement Systems Act, 2007, with apprehensions that the changes could eventually result in charges for UPI users.
The government said the proposed amendment is an enabling provision intended to support the long-term sustainability, technological development and resilience of the UPI ecosystem. The changes form part of the Taxation and Other Laws (Amendment) Bill, 2026.
If Parliament passes the Bill, the UPI and Services Steering Committee, headed by the National Payments Corporation of India (NPCI), will determine whether MDR is introduced and, if so, its applicable structure, the government said.
The Finance Ministry highlighted the need for sustained investment in cybersecurity, fraud prevention and technological infrastructure as UPI transaction volumes continue to rise. It said a sustainable revenue model could also encourage more companies to expand their presence in the UPI ecosystem and reduce dependence on subsidies.
According to the ministry, UPI processed 2,366 crore transactions worth Rs 29.9 lakh crore in July 2026 alone. The payment platform is currently operational in 11 countries, while several other nations have expressed interest in adopting the technology.
The government also rejected reports suggesting that external influences were behind the proposed policy changes, describing such claims as “unfounded and misleading”.
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