UPI to remain free for users, some merchants may face ‘nominal’ charges, says Centre
· Scroll
Consumers making UPI payments will not face any transaction charges, said the Union government on Saturday.
Visit umafrika.club for more information.
“All person-to-person transactions will continue to be free of charge,” stated the Union Ministry of Finance.
The clarification came two days after the Lok Sabha passed the Taxation and Other Laws Amendment Bill 2026, which would allow banks and other service providers to levy charges on payments through UPI and RuPay debit cards.
The new bill would amend the Payment and Settlement Systems Act 2007 and has led to fears that merchants, who would face a Merchant Discount Rate, would pass off the cost to consumers in the future.
Merchant Discount Rate is a fee charged to businesses by banks to cover the costs of processing transactions. The rate typically ranges from 1% to 3% of the transaction value for credit card payments and can be up to 0.9% for debit card transactions.
The United Payment Interface, or UPI, is a real-time payment system. In July, users made 2,366 crore UPI transactions worth Rs 29.9 lakh crore.
On Wednesday, the finance ministry stated that only a limited set of merchant transactions will attract the Merchant Discount Rate. The charges will apply “above a certain threshold and at a nominal rate”, it added.
The ministry also said...