New Delhi: The Payments Council of India (PCI) said that despite the amendment in the Payment and Settlement Systems Act, 2007, common consumers and small businesses will continue to use the Unified Payments System (UPI) without any charges.
The PCI statement comes a day after the Lok Sabha passed the Taxation and Other Laws (Amendment) Bill, 2026, which seeks to allow the government to levy charges on digital payment modes, including UPI.
PCI issued a statement on social media platform ‘X’ saying that UPI has been free for consumers since its launch in 2016 and digital payments will continue to be free without any transaction charges.
The council also clarified that small merchants, including grocery stores, will not have to pay Merchant Discount Rate (MDR) charges for accepting UPI payments.
Along with this, PCI said that even if merchant service charges are imposed on big businesses in the future, consumers will not have to pay any charges for using UPI.
The Council clarified that, wherever applicable, MDR charges are a commercial arrangement between the merchant and the payment service provider and are not passed on to consumers.
Union Finance Minister Nirmala Sitharaman also clarified after the bill’s passage that the Merchant Discount Rate (MDR) applies only to merchants. She added that it has nothing to do with customers.
These investments strengthen financial infrastructure and security. The Payments Council of India (PCI) has also confirmed that UPI services will remain completely free for consumers.
It is noteworthy that Union Finance Minister Nirmala Sitharaman had said on Thursday that MDR charges are applicable on traders and not on customers.
The proceeds are used by banks and financial technology companies to improve their infrastructure and security. He also dismissed Congress leader Jairash Ramesh’s claim that using UPI could be a burden on ordinary people.