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UPI stays free for users, vast majority of transactions to remain free for merchants as well, says government
India🏛️ PoliticsCenter8/9/2026

UPI stays free for users, vast majority of transactions to remain free for merchants as well, says government

The Indian government clarified that users of the Unified Payments Interface (UPI) will continue to pay no transaction charges, while most merchant transactions will remain free. It stated that any potential merchant discount rate (MDR) would apply only to a limited number of high-value transactions at a low rate, below typical credit and debit card rates. This clarification follows amendments to the Payment and Settlement Systems Act, 2007, which sparked concerns about introducing fees on UPI transactions. The government emphasized that the amendment is an 'enabling provision' and does not directly impose charges. The decision comes after the Lok Sabha passed a bill allowing the government to permit charges on UPI transactions, with the final determination to be made by the UPI and Services Steering Committee led by the National Payments Corporation of India (NPCI).

The Indian government has clarified that users of the Unified Payments Interface (UPI) will continue to make transactions without any charges, while some merchants may face “nominal” fees under a new legislative proposal. The Union Ministry of Finance confirmed on Saturday that all person-to-person UPI transactions will remain free of charge, addressing concerns raised following the passage of the Taxation and Other Laws Amendment Bill 2026 by the Lok Sabha. The bill allows banks and service providers to levy charges on UPI and RuPay debit card transactions, though the government emphasized that such levies would apply only to a limited set of merchant transactions above a specific threshold. The amendment to the Payment and Settlement Systems Act 2007, which enables the imposition of Merchant Discount Rates (MDRs), has sparked discussions about potential impacts on consumers and small businesses. However, the government assured that any future MDR would be significantly lower than current rates for credit and debit card transactions. According to officials, the MDR, if implemented, would be applied at a “nominal rate” and would not affect the vast majority of merchant transactions. The UPI and Services Steering Committee, chaired by the National Payments Corporation of India (NPCI), will determine the specifics of the MDR once the amended bill is passed by Parliament. The government highlighted that the proposed changes aim to create a sustainable financial model for UPI, given the rapid growth in transaction volumes. In July 2026 alone, UPI processed 2,366 crore transactions totaling ₹29.9 lakh crore. Officials stressed that the amendment is an “enabling provision” and not a direct imposition of charges on users. They reiterated that the goal is to support ongoing investments in cybersecurity, fraud prevention, and digital infrastructure, ensuring the long-term viability of the payment system. The government also addressed claims that external factors might be influencing policy decisions, calling such narratives “false and misleading.” It pointed to the successful implementation of UPI since its launch in 2016–17, including its status as the world’s largest real-time payment system and its expansion into 11 foreign countries. The ministry emphasized that UPI has remained free for both users and merchants since January 2020, underscoring its commitment to inclusivity and accessibility. The revised framework is intended to encourage greater participation in the UPI ecosystem by promoting competition among service providers. Officials noted that relying solely on subsidies is unsustainable for future growth and that a balanced approach is essential to maintain UPI’s resilience and relevance in an evolving digital landscape. As the amended bill moves forward, the focus remains on balancing innovation with affordability, ensuring that UPI continues to serve millions of users across India and beyond.

How this report was made. Objective News wrote this report from 2 source articles, using AI-assisted synthesis under our methodology. It is our own text, not a copy of any single outlet. Read our methodology.

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Scroll.in logoScroll.inIndependentCenterFactual 95Objective 908/9/2026
UPI to remain free for users, some merchants may face ‘nominal’ charges, says Centre

The Indian government clarified that consumers using the Unified Payments Interface (UPI) for person-to-person transactions will remain free of charge. This statement followed the passage of the Taxation and Other Laws Amendment Bill 2026, which allows banks to impose charges on UPI and RuPay debit card transactions. While merchants may face a 'nominal' Merchant Discount Rate, the government assured that these charges will be significantly lower than those for credit and debit card transactions. The bill aims to support the long-term sustainability of UPI by improving cybersecurity, fraud prevention, and digital infrastructure, while also promoting competition within the UPI ecosystem. The government rejected claims that external influences were driving policy changes.

Bias read (Center): The article presents information from official government sources and provides balanced context regarding the proposed changes to UPI transaction fees. It explains both the potential impact on merchants and the government’s justification for the policy change. There is no clear ideological slant in措

Why factuality (95): This article presents the government's clarification consistently with other sources, detailing that UPI will remain free for users and that MDR may apply to limited merchant transactions. It includes specifics on the threshold and comparison to other payment methods.

Why objectivity (90): The article maintains a neutral tone, focusing on the government's statements without injecting personal opinion or emotional language.

The Hindu logoThe HinduIndependentCenterFactual 85Objective 908/9/2026
UPI stays free for users, vast majority of transactions to remain free for merchants as well, says government

The Indian government clarified that users of the Unified Payments Interface (UPI) will continue to pay no transaction charges, while most merchant transactions will remain free. It stated that any potential merchant discount rate (MDR) would apply only to a limited number of high-value transactions at a low rate, below typical credit and debit card rates. This clarification follows amendments to the Payment and Settlement Systems Act, 2007, which sparked concerns about introducing fees on UPI transactions. The government emphasized that the amendment is an 'enabling provision' and does not directly impose charges. The decision comes after the Lok Sabha passed a bill allowing the government to permit charges on UPI transactions, with the final determination to be made by the UPI and Services Steering Committee led by the National Payments Corporation of India (NPCI).

Bias read (Center): The article presents the government's stance on UPI fee policies without overtly favoring either side. While the issue of charging for UPI transactions is politically sensitive, the report remains balanced by quoting the government's explanation and acknowledging the debate around the amendment to P

Why factuality (85): The article accurately reports the government's clarification on UPI fees, citing the amendment to the Payment and Settlement Systems Act, 2007, and the proposed framework for MDR. It aligns with the cross-source consensus that UPI remains free for most users and that any MDR would be threshold-base

Why objectivity (90): The tone is neutral, presenting the government's position without overt bias. It explains the rationale behind potential MDRs without taking sides, maintaining a balanced perspective.

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