Archive · 16 Sep 2026
PhonePe CEO Says UPI Charges Will Target Merchants, Not Customers
PhonePe says people will still be able to use UPI for free.
Customers will not have to pay a fee for making UPI payments.
Some merchants may have to pay a small charge on certain transactions.
Shops earning less than Rs 1 lakh a year will not be included in this charge system.
For larger shops, most transactions are below Rs 2,000.
Those transactions will not be charged under the proposed framework.
A 0.4% fee will apply to merchant transactions above Rs 2,000.
PhonePe says this money can help banks and payment companies maintain and improve UPI.
PhonePe CEO Sameer Nigam said customers will not be charged for using UPI.
The proposed Merchant Discount Rate framework is intended to support a financially sustainable digital payments ecosystem.
Small merchants with annual turnover below Rs 1 lakh will remain outside the MDR regime.
For larger shops, 96% of transactions below Rs 2,000 will reportedly carry no charge.
Merchants will pay a 0.4% MDR on transactions above Rs 2,000, helping fund UPI ecosystem investments.
- Who
- PhonePe CEO Sameer Nigam discussed the proposed MDR framework for customers, merchants, banks and payment companies.
- What
- A new UPI Merchant Discount Rate framework would charge some merchants while keeping UPI free for customers.
- When
- Wednesday.
- Where
- New Delhi.
- Why
- PhonePe says MDR revenue is needed to make the digital payments ecosystem financially sustainable and fund investments by participating companies and banks.
- Customer charges
- Customers will not be charged for using UPI.
- Small merchant exemption
- Merchants with annual turnover below Rs 1 lakh will remain outside the MDR regime.
- Transactions without charge
- According to PhonePe, 96% of transactions at larger shops are below Rs 2,000 and will carry no charge.
- MDR rate
- Merchants will pay a 0.4% MDR on transactions above Rs 2,000.
- Use of revenue
- MDR revenue would help fund investments by companies and banks in the UPI ecosystem.
- Speaker
- Sameer Nigam, PhonePe CEO.