No charges for UPI users: Govt clarifies person-to-person transactions to remain free
The Indian government has clarified that UPI transactions will remain free for individual users, despite recent legislative amendments. While a potential Merchant Discount Rate (MDR) may be introduced for large business transactions in the future, routine payments will not be affected.
Why it matters
UPI is the backbone of India's digital economy; clarifying fee structures prevents public panic and maintains trust in digital payment adoption.
Will your UPI transactions soon be chargeable? That’s the question on the minds of users since a bill cleared Lok Sabha allowing banks to charge merchants with a fee. However, the government has clarified that Unified Payments Interface or UPI transactions will continue to be free for users.In a press release, the Ministry of Finance has said that users will not be charged for making UPI payments, and all Person-to-Person (P2P) transactions will continue to remain free.It said that if a Merchant Discount Rate (MDR) is introduced in the future, it will apply only to a limited category of merchant transactions above a specified threshold and will be levied at a nominal rate, which will be significantly lower than the MDR that is applicable on debit and credit card transactions.Reports suggest that the government may permit banks and payment service providers to levy an MDR of 0.25% to 0.4% on…
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