Industry Odisha Bureau, Aug 9: Amid the hullabaloo over the reportedly contentious issue of Government of India (GoI) planning to slap charges/fees for future cashless/digital transactions via the Unified Payments Interface (UPI) app, the GoI has reportedly clarified that the UPI would remain free for the users, while a nominal Merchant Discount Rate (MDR) could apply to a certain merchants for UPI transactions above specified threshold in future.
Media reports, citing a press statement released by the Finance Ministry, have stated that, “As and when MDR charges are introduced, they will apply only to a limited set of merchant transactions, above a certain threshold, at a nominal rate, far lower than the debit or credit card MDRs.”
Media reports, citing the press statement released by the Finance Ministry, have added that, “UPI will remain free for the citizens and all person-to-person transactions will also continue to remain free. If any MDR is introduced, it would depend on a threshold and would not become a blanket charge, while a vast majority of UPI transactions would continue to remain free for merchants.”
Notably, the contentious issue has reportedly cropped up as the GoI is reportedly planning to put up the Taxation and Other Laws (Amendment) Bill, 2026, that reportedly proposes changes to Section 10A of the Payment and Settlement Systems Act, 2007. If the Bill is passed in the Parliament, it would reportedly empower the UPI and Services Steering Committee headed by the National Payments Corporation of India (NPCI) to take a final call on deciding and introducing the MDR.
