UPI transactions will remain free for customers: Payments Council of India

In a move to dismiss concerns about reports of potential merchant fees, the Payments Council of India (PCI) announced on Friday that Unified Payments Interface (UPI) transactions will remain free for customers and that small enterprise, including kirana stores, will not be charged for accepting digital payments.

The explanation comes with discussions about the implementation of merchant fees for specific company categories and the rising concern over the sustainability of 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, PCI said in a statement.

PCI clarified that small shopkeepers 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.

On question of whether consumers have to pay if large merchants pay for payment acceptance, PCI emphasized that merchant service charges, where applicable, are commercial arrangements between merchants and payment service providers. They do not mean that consumers pay to use digital payments.

Across the world, merchant service charges are a standard feature of digital payment ecosystems, while consumers continue to enjoy convenient and secure digital payment experiences, it said.

PCI added that UPI has evolved from a new payment platform into the world's largest real-time payment system. As the ecosystem continues to expand, discussions are taking place on how to sustainably support the infrastructure that enables billions of secure transactions every month, while continuing to ensure that consumers and small merchants remain protected.

With regard to who bears the cost of operating UPI if it is free, PCI highlighted that operating a national payment infrastructure involves continuous investment in technology, fraud prevention, cybersecurity, compliance, customer support and innovation.

These costs are currently borne by ecosystem participants including banks and payment service providers who continue to invest so consumers can enjoy a safe, secure and seamless payment experience.

Furthermore, PCI added that UPI has become critical national digital infrastructure used by hundreds of millions of Indians every day. As transaction volumes continue to grow, sustained investment in security, resilience, innovation, fraud prevention and infrastructure will remain essential to ensure that UPI continues to serve consumers and businesses reliably for years to come.