The government has affirmed that person-to-person (P2P) Unified Payments Interface (UPI) transactions will incur no fees, regardless of the transfer amount. The Finance Ministry stated that payments to merchants up to 2000 rupees, alongside transactions encompassed by the zero Merchant Discount Rate (MDR) framework for small merchants, will also remain without charge. The Ministry indicated that approximately 96 percent of all person-to-merchant (P2M) transactions will remain unaffected. The Ministry specified that MDR will apply solely to designated merchant transactions exceeding 2000 rupees. The Ministry emphasized that MDR is neither a tax nor a levy collected by the government or the National Payments Corporation of India (NPCI); rather, it is distributed among payment ecosystem participants, including banks and payment application providers, to facilitate the operation and ongoing development of the UPI ecosystem. NPCI has announced a revised UPI Merchant Discount Rate framework for select merchant transactions, effective from the 15th of next month, while maintaining fee-free access for consumers.
