Finance Minister Nirmala Sitharaman said person-to-person UPI transactions will remain free for users in India.
The clarification addresses public concern over the potential introduction of fees for the Unified Payments Interface, a system central to India's digital economy. If the government were to implement charges, it would mark a significant shift in the cost structure of the country's most popular digital payment method.
According to the Finance Ministry, any future charges would apply only to certain merchant transactions that exceed a threshold of ₹2,000 [1]. The government is considering the re-introduction of a Merchant Discount Rate (MDR) for these high-value transactions [2]. This move aims to align the payment system with the Taxation and Other Laws (Amendment) Bill, 2026 [2].
The proposed MDR framework would target the business side of the transaction rather than the individual sender. While the government has not yet finalized the implementation of these fees, the focus remains on high-value commercial activity, not the daily transfers between individuals.
UPI has seen massive adoption across India due to its zero-cost nature for consumers. By maintaining free person-to-person transfers, the ministry intends to preserve the accessibility of the platform for the general population, while exploring sustainable revenue models for the infrastructure through merchant-side fees.
“Person-to-person UPI transactions will remain free”
The Indian government is attempting to balance the sustainability of its digital payment infrastructure with the need to maintain widespread public adoption. By targeting high-value merchant transactions rather than individual users, the state seeks to generate revenue from commercial entities without discouraging the digital transition among the general population.
