3 weeks ago
Government Clarifies UPI Free for Users, Nominal MDR May Apply
UPI is a way for people in India to send and receive money using their phones.
Right now, people can use UPI without paying any charges.
The Indian government said that will stay the same — UPI will remain free for people who use it.
Some shop owners might have to pay a small fee, but only for big payments above a certain amount.
This fee would be much smaller than what banks usually charge for credit or debit cards.
The government made this possible by passing a new law about payment systems.
A committee will decide later if any fee is needed and how much it should be.
UPI is the biggest real-time payment system in the world.
In one month, people used it for billions of transactions, and it works in 11 other countries too.
So the short version is: UPI stays free for you, and only some big shop payments might get a tiny fee.
UPI payments will remain free for consumers and the vast majority of merchant transactions, the government clarified.
A nominal Merchant Discount Rate may apply only to select merchant transactions above a certain threshold.
The clarification follows the Lok Sabha passing a Bill to amend the Payment and Settlement Systems Act, 2007.
The UPI and Services Steering Committee headed by NPCI will decide on the MDR rate and threshold, if any.
UPI processed 2,366 crore transactions worth Rs 29.9 lakh crore in July 2026 and is live in 11 foreign countries.
- Who
- The Government of India (Ministry of Finance), NPCI, and UPI users and merchants
- What
- The government clarified that UPI remains free for users while a nominal MDR may apply to select merchant payments above a threshold.
- Where
- India, where UPI is also live in 11 foreign countries.
- When
- Two days after the Lok Sabha passed the Bill amending the Payment and Settlement Systems Act, 2007; data cited is for July 2026.
- Why
- To make India's digital payments infrastructure sustainable and allow UPI to expand, particularly in rural and semi-urban areas.
Key facts
- User charges
- Free for consumers
- Merchant charges
- Nominal MDR for select merchant transactions above an undecided threshold
- Deciding body
- UPI and Services Steering Committee headed by NPCI
- Legal basis
- Amendment to the Payment and Settlement Systems Act, 2007
- July 2026 transaction volume
- 2,366 crore transactions
- July 2026 transaction value
- Rs 29.9 lakh crore
- Global reach
- Live in 11 foreign countries
- Official information sources
- Ministry of Finance, Reserve Bank of India, NPCI







