UPI Charges: The government has provided significant relief to those making UPI payments. Now, UPI users will no longer have to pay any charges for payments. The government has also stated that most transactions will remain free for merchants.
UPI free for shopkeepers and merchants as well
No Charges for UPI Users: If you use UPI for small everyday payments, this news is for you. The government has clarified that neither customers nor small businesses will now have to pay any extra charges on most UPI transactions. This means that shopkeepers and customers will not be burdened with additional fees. Digital payments will remain as easy and affordable as before.
Let us inform you that recently in the monsoon session of Parliament, the 'Taxation and Other Laws (Amendment) Bill 2026' was introduced, which aims to amend Section 10A of the Payment and Settlement Systems Act 2007.
What will change for ordinary citizens and small businesses?
- There will be no charge on any UPI payment made by common citizens.
- Sending money from one person to another person's account will remain completely free as before.
- Most small and general merchants will not be charged any fee i.e., MDR on UPI transactions.
According to information received from the PIB, if MDR is implemented in the future, it will only be applicable on large merchant transactions exceeding a certain threshold. The government has clarified that this charge will be very modest compared to the MDR of debit or credit cards. After the law is passed, the NPCI's UPI and Services Steering Committee will decide when and how much MDR should be implemented.
Why is the law being changed?
Some people are misinterpreting this amendment as a move by the government to impose charges on the general public, but this step is intended to ensure UPI remains secure and robust over the long term. Millions of people are connected to UPI. Strengthening cybersecurity, fraud prevention systems, and infrastructure on such a large network requires significant investment.
The government believes that companies need to have a self-sustaining revenue model to bring more competition into the payments system. Relying solely on government subsidies is not feasible for UPI's next phase of expansion.
29.9 lakh crore worth of transactions were done through UPI in July.
It's worth noting that in July 2026 alone, 2,366 crore transactions were conducted through UPI, totaling ₹29.9 lakh crore. UPI has now become the world's largest real-time payment system and is live in 11 foreign countries. This means we can take advantage of UPI even while abroad.
