Payments Council of India says UPI stays free for consumers and small merchants

New Delhi, Aug 7: Amid growing discussions around the future of merchant charges on Unified Payments Interface (UPI) transactions, the Payments Council of India (PCI) on Friday clarified that consumers will continue to use UPI free of cost and small merchants will not be charged for accepting payments through the platform.PCI clarifies UPI chargesIn a post on social media platform X, the industry body said UPI has remained free for consumers since its launch in 2016 and there is no proposal to levy transaction charges on individuals using the platform.It added that UPI was designed to make digital payments accessible to all sections of society and continues to play a key role in India's digital payments ecosystem.“UPI has always been free for consumers since its launch in 2016. Every Indian can continue making instant digital payments without paying any transaction charges,” it said.The clarification comes amid renewed discussions on the sustainability of operating the country's rapidly expanding digital payments infrastructure.CM Suvendu Adhikari Meets Mithun Chakraborty After Actor Undergoes Minor Hand Surgery In KolkataSmall merchants to remain unaffectedPCI said the debate is not about charging consumers but about ensuring long-term support for an ecosystem that now processes billions of transactions every month.According to the industry body, small merchants are not required to pay charges for accepting UPI payments and protecting such businesses remains central to the platform's inclusive growth strategy.Payments Council of India: "UPI will continue to remain free for consumers, and small merchants will not be charged for accepting digital payments.""Banks, fintech companies, NPCI, and the RBI have been investing in technology, cybersecurity, fraud prevention, and innovation to… pic.twitter.com/29F6cDjVxw— ANI (@ANI) August 7, 2026UPI has enabled millions of small businesses across the country to accept digital payments without the cost barriers traditionally associated with electronic transactions.“Small merchants are not required to pay any charges (MDR) to accept UPI payments. UPI was designed to make digital payments accessible for even the smallest businesses across India, and protecting small merchants remains central to the ecosystem's inclusive growth,” it added.Also Watch:Focus on ecosystem sustainabilityPCI noted that UPI has evolved from a new payment platform into the world's largest real-time payment system, resulting in increasing requirements for technology upgrades, cybersecurity, fraud prevention and operational resilience.As transaction volumes continue to rise, discussions are underway on how to sustainably support the infrastructure while ensuring that consumers and small merchants remain unaffected.The council said banks, payment companies, fintech firms, the National Payments Corporation of India (NPCI) and the Reserve Bank of India (RBI) have collectively invested for nearly a decade in building and maintaining the UPI ecosystem.(Except for the headline, this article has not been edited by FPJ's editorial team and is auto-generated from an agency feed.)

The Payments Council of India on Friday said Unified Payments Interface (UPI) transactions will continue to remain free for consumers and that small merchants, including kirana stores, will not be charged for accepting digital payments, seeking to allay concerns over reports of possible merchant charges.The clarification comes amid growing debate over the sustainability of India's digital payments ecosystem and discussions around introducing merchant charges for certain categories of businesses."UPI will continue to remain free for consumers, and small merchants will not be charged for accepting digital payments," the authority said in a statement.Also read: Will UPI become chargeable? FM Niramala Sitharaman clears the airPCI said any merchant service charges (MSC), where applicable, would be commercial arrangements between merchants and payment service providers and would not translate into consumers paying for UPI transactions."Banks, fintech companies, NPCI and the RBI have been investing in technology, cybersecurity, fraud prevention and innovation to maintain UPI's reliability. Any merchant service charges, where applicable, would be commercial arrangements between merchants and payment providers and would not mean consumers have to pay for using UPI," it said.The council noted that UPI has remained free for consumers since its launch in 2016 and was designed to make digital payments accessible even for the smallest businesses. Protecting small merchants continues to remain central to the ecosystem's inclusive growth, it added.Citing recent discussions around UPI charges, the council noted that the platform has evolved into the world's largest real-time payment system, processing billions of transactions every month. As transaction volumes continue to surge, stakeholders are exploring ways to sustainably support the infrastructure required to maintain the system while ensuring consumers and small merchants remain protected.According to the body, banks, payment companies, fintech firms, the National Payments Corporation of India (NPCI) and the Reserve Bank of India (RBI) have collectively invested for nearly a decade in technology, cybersecurity, fraud prevention, innovation and customer support to build and maintain the payments infrastructure.It added that the costs of operating the national payments network, including investments in security, compliance, customer support and technology, are currently borne by banks and payment service providers and further stressed that merchant service charges, where applicable for larger merchants, are a standard feature of digital payment ecosystems globally and should not be interpreted as charges on consumers using UPI.The industry body said continued investment in infrastructure, security and innovation will be critical to ensuring that UPI, now a key national digital public infrastructure, remains reliable and resilient as usage continues to grow.The statement comes soon after Finance Minister Nirmala Sitharaman rejected Congress' claim that ordinary people could end up paying more for UPI transactions. She clarified that any Merchant Discount Rate (MDR) charged on digital transactions would be borne by merchants, not customers.