Government Confirms UPI Transactions to Remain Free for Consumers
Government Confirms UPI Transactions to Remain Free for Consumers
IN · Published Aug 8, 2026
The Indian government has clarified that Unified Payments Interface (UPI) transactions will remain free for consumers, including all person-to-person (P2P) payments.
The Ministry of Finance stated that if a Merchant Discount Rate (MDR) is introduced in the future, it will apply only to a limited category of high-value merchant transactions above a specified threshold.

Impact & Risks

Consumers and small merchants will not face charges for UPI transactions, ensuring continued accessibility to digital payments. However, the introduction of a nominal MDR for high-value merchant transactions could impact businesses that fall under the specified threshold. The government emphasized that the amendment is an enabling provision to support the UPI ecosystem's growth and sustainability, which requires significant investments in cybersecurity, fraud prevention, and infrastructure. The move aims to balance the need for financial inclusion with the necessity of creating a self-sustaining revenue model for UPI.

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