UPI stays free for users, vast majority of transactions to remain free for merchants as well, says government
The Indian government clarified that UPI transactions will remain free for consumers, with most merchant transactions also staying free. Any future fees would be limited to specific high-volume merchant transactions to support infrastructure and security.
Why it matters
As UPI is a critical component of India's digital economy, this clarification prevents market uncertainty regarding the cost of digital payments.
The government sought to shut down speculation on plans to impose fees on the country's ubiquitous digital payments network, saying on Saturday (August 8, 2026) that consumers will not have to pay transaction charges for using UPI, while the vast majority of merchant transactions will also remain free.
The government said any future merchant discount rate (MDR), if introduced, would apply only to a limited set of merchant transactions above a specified threshold and at a nominal rate, which would be lower than typical debit and credit card MDRs.
All person-to-person UPI transactions will continue to be free, it said.
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