UPI Remains Free Amid New Legislation: PCI Clarifies Cost Dynamics

The Payments Council of India reassures that Unified Payments Interface (UPI) will stay free for consumers, emphasizing that small merchants won’t incur charges for digital payments. Recent legislative changes spark conversation on commercial costs, but small businesses remain protected from any Merchant Discount Rate (MDR) obligations.

The Payments Council of India (PCI) has reaffirmed that the Unified Payments Interface (UPI) will remain free for consumers, even as discussions on transaction fees persist. According to PCI, any applicable merchant service charges are specific to arrangements between merchants and payment service providers, not affecting consumer use of digital payments.

PCI highlighted UPI's transformation into the world’s largest real-time payment system since 2016, citing the need for ongoing investments in technology and security to maintain this national infrastructure. These costs are met by ecosystem participants like banks and payment providers to ensure seamless, secure user experiences.

Despite emerging cost discussions, PCI emphasizes that small merchants and kirana stores are exempt from Merchant Discount Rate (MDR) charges, keeping digital payments accessible for minor businesses across India. This comes as new legislative amendments propose an MDR on select business UPI transactions, sparking industry discussions.