No Need for Misconceptions Over UPI Charges - Centre

The Centre has clarified that there is no need for confusion or misinformation over the revised UPI charges. Person-to-person UPI transactions will remain completely free, irrespective of the amount. Payments made to merchants up to Rs 2,000 will also continue without Merchant Discount Rate (MDR), while small merchants covered under the zero-MDR framework will not face additional payment costs. The government has also made it clear that customers will not have to bear MDR charges.

According to the Centre, MDR will apply only to specified merchant transactions above Rs 2,000, at a nominal rate of 0.4%. The government said around 96% of merchant UPI transactions will remain unaffected, while banks have been advised to ensure that merchants do not pass MDR costs on to customers. The Centre clarified that MDR is not a tax collected by the government or NPCI, but a charge shared among participants in the payment ecosystem.