No, your UPI transactions aren't getting charged: Government refutes fee rumors claims
Addressing misinterpretations over proposed legislative changes, the government confirmed that consumers will face zero transaction fees on everyday payments, and all Person-to-Person (P2P) transfers will continue without any charges.
- Aug 8, 2026,
- Updated Aug 8, 2026 9:52 PM IST
In a direct clarification aimed at quashing mounting speculation surrounding digital payment costs, the Ministry of Finance has categorically affirmed that Unified Payments Interface (UPI) transactions will remain completely free for citizens.
Addressing misinterpretations over proposed legislative changes, the government confirmed that consumers will face zero transaction fees on everyday payments, and all Person-to-Person (P2P) transfers will continue without any charges. The clarification comes in response to reports suggesting that upcoming legal amendments could introduce widespread fees across the digital payment network.
Dismissing reports that policy changes were prompted by outside forces, the government pushed back against the narrative. "Some of the media reports have suggested that external influences may be driving policy changes. This is unfounded, completely false and misleading," the press release said. "If external pressure had been a factor, the government would not have introduced UPI in 2016 or made it free of charge for both merchants as well as citizens since January 2020 and ensured that it became the world's largest real time interoperable payment system."
The policy context centers on proposed amendments to Section 10A of the Payment and Settlement Systems (PSS) Act, 2007, under the Taxation and Other Laws (Amendment) Bill, 2026. The government clarified that the amendment is strictly an enabling provision intended to ensure the long-term sustainability, technological robustness, and security of the UPI ecosystem.
As transaction volumes surge, continuous investments in cybersecurity, fraud prevention, and core infrastructure are vital. To expand UPI into rural and semi-urban pockets and foster market competition, relying solely on subsidies is no longer viable for long-term growth.
Under the framework:
- For Citizens: All payments and P2P transfers remain 100% free.
- For Merchants: The vast majority of merchant transactions will continue to incur no charges.
- Future MDR: Once Parliament passes the amendment, the "UPI and Services Steering Committee" — headed by the National Payments Corporation of India (NPCI) — will decide whether to introduce a Merchant Discount Rate (MDR). Any future MDR will apply strictly to a limited set of merchant transactions above a specific threshold, set at nominal rates far lower than standard debit or credit card MDRs.
Highlighting the scale of the ecosystem, official data revealed that UPI processed 2,366 crore transactions worth ₹29.9 lakh crore in July 2026 alone. The system is currently live in 11 foreign countries, with several others expressing interest in adopting the technology.
Urging the public not to succumb to panic or circulate unverified messages, the Ministry advised citizens to rely solely on official communications issued by the Ministry of Finance, the Reserve Bank of India (RBI), and the NPCI.
In a direct clarification aimed at quashing mounting speculation surrounding digital payment costs, the Ministry of Finance has categorically affirmed that Unified Payments Interface (UPI) transactions will remain completely free for citizens.
Addressing misinterpretations over proposed legislative changes, the government confirmed that consumers will face zero transaction fees on everyday payments, and all Person-to-Person (P2P) transfers will continue without any charges. The clarification comes in response to reports suggesting that upcoming legal amendments could introduce widespread fees across the digital payment network.
Dismissing reports that policy changes were prompted by outside forces, the government pushed back against the narrative. "Some of the media reports have suggested that external influences may be driving policy changes. This is unfounded, completely false and misleading," the press release said. "If external pressure had been a factor, the government would not have introduced UPI in 2016 or made it free of charge for both merchants as well as citizens since January 2020 and ensured that it became the world's largest real time interoperable payment system."
The policy context centers on proposed amendments to Section 10A of the Payment and Settlement Systems (PSS) Act, 2007, under the Taxation and Other Laws (Amendment) Bill, 2026. The government clarified that the amendment is strictly an enabling provision intended to ensure the long-term sustainability, technological robustness, and security of the UPI ecosystem.
As transaction volumes surge, continuous investments in cybersecurity, fraud prevention, and core infrastructure are vital. To expand UPI into rural and semi-urban pockets and foster market competition, relying solely on subsidies is no longer viable for long-term growth.
Under the framework:
- For Citizens: All payments and P2P transfers remain 100% free.
- For Merchants: The vast majority of merchant transactions will continue to incur no charges.
- Future MDR: Once Parliament passes the amendment, the "UPI and Services Steering Committee" — headed by the National Payments Corporation of India (NPCI) — will decide whether to introduce a Merchant Discount Rate (MDR). Any future MDR will apply strictly to a limited set of merchant transactions above a specific threshold, set at nominal rates far lower than standard debit or credit card MDRs.
Highlighting the scale of the ecosystem, official data revealed that UPI processed 2,366 crore transactions worth ₹29.9 lakh crore in July 2026 alone. The system is currently live in 11 foreign countries, with several others expressing interest in adopting the technology.
Urging the public not to succumb to panic or circulate unverified messages, the Ministry advised citizens to rely solely on official communications issued by the Ministry of Finance, the Reserve Bank of India (RBI), and the NPCI.