Unified Payments Interface (UPI) transactions will continue to remain free for consumers, the Payments Council of India (PCI) has clarified, amid growing concerns over the possibility of charges being introduced for digital payments.

The industry body also said that small merchants, including neighbourhood shops and kirana stores, will not be charged for accepting digital payments.

The clarification comes as discussions around the possible reintroduction of a Merchant Discount Rate (MDR) on UPI payments have gained attention. MDR is a fee paid by merchants to banks and payment service providers for processing digital transactions.

According to the PCI, any applicable merchant charges would be part of commercial arrangements between payment providers and merchants, rather than charges imposed on consumers.

What does this mean for consumers?

For everyday UPI users, the message is clear: there will be no charge for making UPI payments. Small businesses will also continue to be protected from additional costs for accepting digital payments.

The PCI has previously advocated for a possible nominal MDR on larger merchants to help payment companies sustain investments in technology, cybersecurity, fraud prevention and digital payment infrastructure.

The clarification is aimed at addressing concerns that any change in the UPI payment ecosystem could eventually lead to consumers being charged for using the country’s most widely adopted digital payment system.

For now, consumers can continue using UPI without worrying about a transaction fee.