UPI Is a National Achievement Built by Indians, for Indians: Government
Government rejects concerns over UPI charges, saying PSS Act amendments are aimed at ensuring the long-term sustainability, security and growth of India’s digital payments ecosystem.
The Government of India has reiterated that the Unified Payments Interface (UPI) will remain free for citizens, dismissing concerns that recent proposed changes to the Payment and Settlement Systems Act could lead to charges on everyday transactions. The government clarified that consumers will not face transaction charges and that all person-to-person (P2P) UPI transactions will continue to remain free. “As and when Merchant Discount Rate (MDR) charges are introduced, they will apply only to a limited set of merchant transactions, above a certain threshold, at a nominal rate, far lower than debit or credit card MDRs,” said an official statement from the Ministry of Finance dated August 08, 2026.
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The government also stressed that the vast majority of merchant transactions on UPI will continue to remain free.
The government said the recent amendment to the Payment and Settlement Systems Act (PSS Act) is an enabling provision intended to strengthen UPI’s long-term sustainability, technological capabilities and resilience against emerging risks, rather than a move to impose charges on ordinary users.
With UPI transaction volumes rising sharply, the government said continued investments are required in cybersecurity, fraud prevention, infrastructure and technological upgrades. “It is necessary to increase competition by encouraging more companies to expand their operations, which requires a self-sustaining revenue model,” it said.
The government maintained that dependence on subsidies alone would not be viable for the next phase of UPI’s growth and that a balanced framework is needed to keep the digital payments ecosystem robust, inclusive and future-ready.
Government rejects ‘external pressure’ narrative
Rejecting reports suggesting that external influences were driving the policy changes, the government termed such claims “unfounded, completely false and misleading”. It pointed out that UPI was launched in 2016 and that the government has kept it free for citizens and merchants since January 2020.
“Some of the media reports have suggested that external influences may be driving policy changes. This is unfounded, completely false and misleading. If external pressure had been a factor, the government would not have introduced UPI in 2016 or made it free of charge for both merchants as well as citizens since January 2020 and ensured that it became the world’s largest real time interoperable payment system,” the Ministry said.
The government said UPI has subsequently emerged as the world’s largest real-time interoperable payment system, underlining that the policy changes should be viewed in the broader context of maintaining a sustainable, competitive and innovative digital payments infrastructure.
“The amendment should therefore be viewed in the context of the Government’s broader objective of ensuring that India’s digital payment infrastructure remains sustainable, competitive, innovative and capable of serving the country’s rapidly expanding digital economy.
“The truth is simple: UPI is India’s own innovation, and the government remains committed to keeping it free for citizens while ensuring its sustainability for decades to come.
The Next Wave of Growth
India now stands at the cusp of the next wave of digital payments growth. To expand UPI further into rural and semi-urban areas and maintain competitiveness, the UPI ecosystem must be self- sustainable and affordable. The amendment to the PSS Act is a forward-looking step to ensure that UPI continues to thrive as a secure, affordable, inclusive, and globally recognized payment system,” the official release said.
UPI enters next phase of growth
Since its launch in 2016-17, UPI has transformed India’s digital payments landscape and become a key component of the country’s digital economy. In July 2026 alone, UPI processed 2,366 crore transactions worth Rs 29.9 lakh crore, according to the government.
UPI is also operational in 11 foreign countries, with several other nations expressing interest in adopting or integrating the system. The government described UPI as a national achievement built by Indians for Indians and said it would continue to support its expansion and development.
Conclusion
In conclusion, the Government of India reaffirms that UPI will remain free for citizens, with no charges on everyday transactions. Any future MDR will be nominal and apply only to a limited set of merchant transactions. UPI continues to be India’s flagship digital innovation, expanding globally.
“UPI is a national achievement built by Indians, for Indians. The Government has promoted, funded and grown it for a decade, and will continue to do so. Citizens are requested to rely only on official information from the Ministry of Finance, the Reserve Bank of India and NPCI, and not to forward unverified messages,” the government said.
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