UPI Stays Free For Users, Says Government Amid Confusion Over PSS Act Amendment
UPI stays free for users, the Government of India clarified on Saturday, seeking to dispel confusion around a recent amendment to the Payment and Settlement Systems Act (PSS Act). The government stated that customers making UPI payments will not be required to pay any transaction charges, and that all person-to-person (P2P) transactions will continue to remain free.
UPI Stays Free For Users As Government Confirms No Charges On Daily Transactions
The government said that for merchants, most transactions on UPI will also continue to remain free of cost. It clarified that if a Merchant Discount Rate (MDR) is applied in future, it would apply only to a limited number of merchant transactions above a certain threshold, and at a nominal rate that would be significantly lower than debit or credit card MDR.
According to the government, any decision on applying MDR, if required, will be taken by the NPCI-led UPI and Services Operations Committee, following the passage of the Taxation and Other Laws (Amendment) Bill, 2026, in Parliament. The Bill proposes an amendment to Section 10A of the Payment and Settlement Systems Act, 2007.
Government Explains Reasons Behind PSS Act Amendment
The government said the recent amendment to the PSS Act had created some confusion, with certain sections misinterpreting it as an attempt to impose charges on ordinary users. It clarified that the amendment is instead a supportive provision aimed at ensuring UPI’s long-term sustainability, technological advancement and resilience against emerging risks.
Officials pointed to the rapid growth in UPI transaction volumes, which they said requires continuous and significant upgrades to cybersecurity, fraud prevention and infrastructure. The government also said that encouraging more companies to expand their operations within the UPI ecosystem requires a self-sustaining revenue model to boost competition, adding that relying solely on subsidies is not viable for the next phase of UPI’s growth. It said a balanced framework is necessary to keep UPI robust, inclusive and future-ready.
Government Dismisses Claims Of External Influence On Policy
The government firmly rejected media reports suggesting that external pressures were influencing the policy changes, describing such claims as baseless, incorrect and misleading. It said that if external pressure had been a factor, the government would not have launched UPI in 2016, made it free for both merchants and citizens from January 2020, or worked to establish it as the world’s largest real-time interoperable payment system.
The government said the amendment should instead be viewed in the context of its broader objective of keeping India’s digital payments infrastructure sustainable, competitive and innovative, capable of meeting the needs of the country’s fast-growing digital economy.
Government Reaffirms Commitment To Free And Sustainable UPI
The government reiterated that UPI is India’s own innovation, and that it remains committed to keeping the platform free for citizens while ensuring its sustainability for decades to come. It said India now stands at the threshold of the next wave of digital payments growth, and that expanding UPI further into rural and semi-urban areas while maintaining competitiveness requires the ecosystem to be self-reliant and cost-efficient.
The government described the PSS Act amendment as a forward-looking step intended to ensure UPI continues to thrive as a secure, affordable, inclusive and globally recognised payment system.
Government Lists Key Assurances On UPI’s Future
The government confirmed several points for citizens. It said UPI will remain free for citizens, with no charges on daily transactions. Any MDR applied in future will be nominal and limited to select merchant transactions only. It added that UPI continues to be India’s flagship digital innovation and is expanding globally.
Since its launch in 2016-17, the Unified Payments Interface has transformed India’s digital economy into one of the world’s most inclusive and dynamic payment systems. Officials said UPI is now the world’s largest real-time payment system, having processed 2,366 crore transactions worth Rs 29.9 lakh crore in July 2026 alone. The platform is now active in 11 foreign countries, with several others expressing interest in adopting it.
Government Urges Citizens To Rely On Official Sources
The government described UPI as a national achievement built by Indians for Indians, stating it has supported, funded and expanded the platform for over a decade and would continue to do so. It urged citizens to rely only on official information issued by the Ministry of Finance, the Reserve Bank of India and NPCI, and to avoid forwarding unverified information regarding UPI charges.
