Will UPI payments incur a charge? Here is what the RBI Governor says

Will you have to pay a charge for UPI (Unified Payments Interface) payments in the future? That is a question on many people's minds after the Finance Ministry introduced the Payment and Settlement Systems (Amendment) Bill, 2027 in Parliament, paving the way for the possible introduction of a Merchant Discount Rate (MDR) on digital payment modes, including UPI. 
 
The Reserve Bank of India (RBI) Governor Sanjay Malhotra on Wednesday said it was too premature to talk about how things were going to pan out as the government was still carrying out the amendment. He said that their task was to continue strengthening this public infrastructure. 
 
"Costs have to be paid by someone. We all want that this public infrastructure should continue to strengthen, become more efficient... We continue to do that. That is our primary focus as of now," Malhotra told reporters in an interaction following the monetary policy committee announcement.

MUST READ: MDR on UPI transactions over ₹2,000? Here’s what we know so far
 
As of now, there are no charges on UPI payments, unlike other payment instruments like credit and debit cards where an MDR is levied. The aim behind keeping UPI free was to drive widespread adoption of digital payments. 
 
However, in the last few years, the scale and size of UPI have grown significantly. According to the latest data released by National Payments Corporation of India (NPCI), UPI transactions hit a record high of Rs 29.9 lakh crore in July 2026, with volumes touching 23.66 billion. As it continues to scale, many argue that without MDR, it will be financially difficult to sustain.
 
The talk is that UPI payments of higher-value transactions, say above Rs 2,000, may be levied an MDR, and this will only be for merchant transactions and person-to-person payments. 
 
The bill introduced in the Parliament as such doesn't prescribe any MDR rate. There would be a need for legislative approval for any such levy, and the RBI will also have to issue separate guidelines. 
 
Governor Malhotra said on Wednesday that one would have to wait and see. He pointed out that consumers were already in a way paying a charge, basically signalling that while there may not be any direct fee right now, it may still be getting passed through the economy indirectly.

ALSO READ: Could MDR revive credit and debit cards? Survey suggests higher-value UPI payments may decline
 
"It may be the general economy, and you don't get to see it directly. It's getting passed on; it may not be directly on the user base principle, but someone is paying the cost," he said. 
 
The government had been subsidising low-value payments up to Rs 2,000 made to small merchants through an incentive scheme. Banks are reimbursed for such transactions.
 
" What is important is that we continue to invest and continue to find a means, whether it's MDR or other things," Malhotra noted.