New Delhi, September 16, 2026 (Yes Punjab News)
UPI customers will continue to use the digital payment platform without any charges, while the new Merchant Discount Rate (MDR) framework is aimed at creating a financially sustainable ecosystem, PhonePe CEO Sameer Nigam said on Wednesday.
Speaking to IANS, Nigam said customers would not be charged for either person-to-person (P2P) or person-to-merchant (P2M) UPI transactions.
“No, there are no fees for customers on UPI at all. Customers have never been charged for using UPI, nor will they be charged in the future,” Nigam said.
He said small merchants with an annual turnover of less than Rs 1 lakh would remain outside the MDR regime.
For larger merchants, he said, 96 per cent of transactions are below Rs 2,000 and would therefore attract no MDR under the new framework.
Transactions above Rs 2,000 would attract a 0.4 per cent MDR, which would be paid by merchants rather than customers, Nigam said.
He explained that the revenue generated through MDR would help finance investments by banks and companies that operate and support the UPI ecosystem.
“The industry spends about Rs 10,000 crore to Rs 12,000 crore a year minimum on just keeping UPI infrastructure alive,” Nigam told IANS.
He said the ecosystem also incurs expenses related to KYC compliance, cybersecurity, risk management, fraud prevention, merchant chargebacks and capital expenditure.
“We needed a way to get that revenue back into the industry so that UPI grows in a sustainable manner,” Nigam said.
Asked whether consumers should be concerned about the revised framework, he reiterated that there would be no additional cost for them.
“There is no charge for the customer. Person-to-person is also free, person-to-merchant is also free,” he said.
Nigam added that merchants required to pay MDR would not be permitted to pass the charge on to customers.
He also expressed confidence that India’s digital payments market would continue to expand rapidly despite the introduction of the new MDR framework.
According to Nigam, UPI had around 20 crore users in 2020, a figure that has now increased to approximately 50-55 crore.
He said the new revenue model could also enable private fintech companies to increase spending on marketing, innovation and research and development.
“It is very important that businesses be able to make fair money,” Nigam said.
The revised MDR framework is intended to provide a revenue stream for the companies and banks supporting India’s rapidly expanding digital payments infrastructure while keeping UPI transactions free for customers.
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