Finance Minister Nirmala Sitharaman said Unified Payments Interface (UPI) transactions will remain free for consumers during a session of the Rajya Sabha on Monday [1], [2].
This assurance comes as the Indian government navigates updates to taxation laws, addressing public concerns that digital payment convenience could be eroded by new fees.
The announcement occurred on day 16 [1] of the Parliament's Monsoon Session in New Delhi. Sitharaman said to the upper house while the legislature dealt with the Taxation and Other Laws (Amendment) Bill, 2026 [1], [2].
Reports on the legislative outcome of the bill vary. Some sources state the Rajya Sabha passed the legislation [2], [3], while other reports indicate the house returned the bill [1].
Despite the procedural disagreement over the bill's status, the Finance Minister was explicit regarding the cost of digital payments. "Consumers won’t pay UPI charge," Sitharaman said [2]. She said that "UPI payments will remain free for consumers" [3].
The minister also addressed the technical side of payment processing. She said that no framework on the Merchant Discount Rate (MDR) has been finalized yet [3]. The MDR is the fee that merchants pay to banks, and payment gateways, for processing card or digital transactions.
By maintaining zero charges for the end-user, the government seeks to protect the growth of a cashless economy. The UPI system has become a cornerstone of daily commerce in India, and any shift in the fee structure for consumers could impact adoption rates among lower-income populations.
“"Consumers won’t pay UPI charge."”
The government's commitment to free UPI transactions suggests a priority on financial inclusion over immediate revenue generation from digital payment rails. By delaying a finalized Merchant Discount Rate framework, the administration is avoiding a potential conflict with merchants who might pass those costs down to consumers, thereby preserving the momentum of India's digital public infrastructure.
