Centre Clarifies on UPI Transactions

The Centre has clarified that UPI transactions will continue to remain free for users, with no transaction charges imposed on payments made by consumers. The clarification came after the Lok Sabha passed a bill amending the Payment and Settlement Systems Act, 2007, which could empower the government to introduce Merchant Discount Rate (MDR) charges on certain UPI merchant transactions in the future. The Centre stressed that person to person UPI payments will remain free as before.

If MDR charges are introduced in the future, they would apply only to transactions by specified merchants within prescribed limits, the government said. The charges are expected to be lower than the nominal fees levied on debit and credit card transactions, while UPI services will remain free for most businesses and merchants. The government also clarified that MDR would not be imposed uniformly on all merchants. Meanwhile, PhonePe announced that UPI services will remain free.