The clarification was issued by the Government through PIB Delhi. The government said the vast majority of UPI transactions will remain free for merchants as well. If MDR is introduced, it will not be a blanket charge across all UPI transactions.
UPI Charges and Proposed MDR Framework
The proposed changes are linked to an amendment to the Payment and Settlement Systems Act (PSS Act). The amendment is described as an enabling provision aimed at supporting UPI’s long-term sustainability, technological advancement, financial inclusion and resilience against emerging risks.
Once Parliament passes the Taxation and Other Laws (Amendment) Bill, 2026, which proposes to amend Section 10A of the Payment and Settlement Systems Act, 2007, the “UPI and Services Steering Committee” headed by NPCI will decide on the MDR, if any. The government has stated that any such MDR would be nominal and significantly lower than debit or credit card MDRs.
The government said UPI’s rapidly increasing transaction volumes require continuous investment in cybersecurity, fraud prevention and infrastructure. It also said that encouraging more companies to expand their operations would require a self-sustaining revenue model, while reliance on subsidies alone would not be viable for the next wave of growth.
UPI Records 2,366 Crore Transactions Worth ₹29.9 Lakh Crore
Since its launch in 2016-17, the Unified Payments Interface (UPI) has expanded into a major part of India’s digital payments ecosystem. In July 2026 alone, UPI processed 2,366 crore transactions worth ₹29.9 lakh crore, according to the government.
UPI is also live in 11 foreign countries, while many other countries have shown interest in the payment system. The government said the platform has grown into the world’s largest real-time payment system and continues to support the expansion of digital payments across India.
The government also rejected reports suggesting that external influences were behind the policy change, calling such claims unfounded, completely false and misleading. It said UPI was introduced in 2016, while charges for merchants as well as citizens have remained free since January 2020.
The government said the amendment is intended to support the next phase of UPI growth, including expansion into rural and semi-urban areas. It reiterated that UPI will remain free for citizens, there will be no charges on everyday transactions for citizens, and any future MDR will be limited to a specific set of merchant transactions and remain nominal.
The Government of India has asked citizens to rely only on official information from the Ministry of Finance, the Reserve Bank of India and NPCI, rather than forwarding unverified messages. It also said UPI remains an Indian digital payments platform and that the government will continue supporting its development and expansion.
