Transactions through UPI and RuPay debit cards may soon be charged. This means that using UPI will no longer be free, you may have to pay extra for it.
In fact, according to a media report, the government is evaluating a proposal to bring back merchant charges on transactions made through Unified Payments Interface (UPI) and RuPay debit cards. If this happens, then digital payments will become expensive.
What is the detail
According to a report by The Economic Times, the government is preparing to impose merchant charges on these transactions. In the digital payment industry, Merchant Discount Rate (MDR) is the fee that a merchant or shopkeeper has to pay to start a payment service. This fee was waived by the government in the year 2022. Now there is news that the government may consider implementing it again. Currently, there is no MDR applicable on UPI and RuPay debit card payments, which are facilitated through the National Payments Corporation of India (NPCI).
Is under review
The news report quoted a banker as saying that a formal request to re-impose MDR on UPI transactions for large merchants has been submitted to the central government by the banking industry and the relevant departments are reviewing it. As per the proposal, MDR may be re-imposed for merchants with an annual turnover of over Rs 40 lakh based on their GST filings. The government may also consider a tiered pricing model for UPI where large merchants will have to pay higher charges while small businesses will have to pay lower charges. UPI payments will remain free for merchants with an annual turnover of less than Rs 40 lakh, the report said.
UPI Transactions
According to data from the National Payments Corporation of India (NPCI), UPI recorded 16.11 billion transactions in February 2025, amounting to about Rs 22 trillion. The total transactions in January were 16.99 billion.
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