India, Aug. 8 -- Update | August 8, 21:16 ISST

Addressing concerns over merchant discount rates (MDR) on UPI, the finance ministry categorically clarified that consumers will not be charged for making payments through the digital payments network. It added that person-to-person (P2P) UPI transactions will continue to remain free.

The ministry said that if MDR is introduced, it would apply only to a limited set of merchant transactions above a specified threshold and be levied at a nominal rate.

The clarification comes after the Centre proposed amendments to the Payment and Settlement Systems Act, 2007, through the Taxation and Other Laws (Amendment) Bill, 2026. The proposed changes would empower the government to prescribe MDR for spec...