By Shishir Prashant 
PrashantNews
The Government on Saturday said users of the Unified Payments Interface (UPI) will not be charged for making payments, amid concerns over a recent amendment to the Payment and Settlement Systems Act (PSS Act).
The government said all person-to-person (P2P) UPI transactions will continue to remain free. It also clarified that the vast majority of merchant transactions will remain free of charge. If a Merchant Discount Rate (MDR) is introduced in future, it will apply only to a limited set of merchant transactions above a specified threshold and at a nominal rate, significantly lower than debit or credit card MDRs.
The clarification comes after the proposed amendment to Section 10A of the PSS Act, 2007, triggered concerns that UPI users could face transaction charges. The government said the amendment is only an enabling provision aimed at ensuring UPI’s long-term sustainability, technological advancement, cybersecurity and resilience against emerging risks.
Once Parliament passes the Taxation and Other Laws (Amendment) Bill, 2026, the “UPI and Services Steering Committee”, headed by NPCI, will decide on the MDR, if any.
The government said UPI’s rapidly growing transaction volumes require continuous investment in infrastructure, fraud prevention and cybersecurity. It also stressed the need for a sustainable revenue model to encourage greater competition and attract more companies to the ecosystem.
UPI, launched in 2016-17, has transformed India’s digital payments landscape and become the world’s largest real-time payment system. In July 2026 alone, it processed 2,366 crore transactions worth ₹29.9 lakh crore. UPI is currently live in 11 foreign countries, with several others showing interest.
Rejecting reports of external pressure behind the policy change, the government said UPI is “India’s own innovation” and reiterated its commitment to keeping it free for citizens while ensuring its sustainability.
The government urged citizens to rely on official information from the Ministry of Finance, RBI and NPCI and avoid forwarding unverified messages.