No charges for UPI users: Govt clarifies person-to-person transactions to remain free
In a press release, the Ministry of Finance has said that users will not be charged for making UPI payments, and all Person-to-Person (P2P) transactions will continue to remain free. It said that if a Merchant Discount Rate (MDR) is introduced in the future, it will apply only to a limited category of merchant transactions above a specified threshold.
The Indian government has clarified that Unified Payments Interface (UPI) transactions will remain free for users despite a bill being passed in the Lok Sabha that allows banks to charge merchants a fee. The Ministry of Finance stated that UPI payments, particularly person-to-person (P2P) transactions, will continue to be free. The government explained that if an MDR is introduced in the future, it will only apply to a limited category of merchant transactions above a certain threshold and will be levied at a nominal rate.
Routine payments, such as those for groceries, auto-rickshaw rides, and taxi fares, are not expected to be affected. The government aims to ensure the UPI ecosystem becomes financially self-sustaining and affordable as it expands, particularly into rural and semi-urban areas.
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