India has opened the door to a possible change in the way UPI payments are charged, raising an important question: Will UPI no longer be free?

A recent bill removes a legal barrier that currently prevents banks and payment service providers from imposing a Merchant Discount Rate (MDR) on UPI and certain other digital payments.

MDR is essentially a fee paid by merchants to banks or payment processors for processing digital transactions. UPI has traditionally operated under a zero-additional-charge model, allowing merchants to accept payments without directly paying this fee.

However, the government has indicated that any MDR introduced would be nominal and limited to certain merchant transactions.

Importantly, person-to-person UPI payments are expected to remain free. Routine transactions such as sending money to friends and family are therefore not expected to attract a new UPI fee.

Most merchant transactions are also expected to remain free, while large merchants and high-value commercial transactions could potentially face MDR if the new structure is introduced.

UPI Charges May Change | New MDR Rules Explained | Will Consumers and Merchants Have to Pay More?

merchant-discount-rate-india

Merchant Discount Rate India, News on Merchant Discount Rate India, stories on Merchant Discount Rate India, articles on Merchant Discount Rate India, Merchant Discount Rate India stories at Wion, Merchant Discount Rate India news, Merchant Discount Rate India latest news

merchant discount-rate-india

UPI Charges May Change | New MDR Rules Explained | Will Consumers and Merchants Have to Pay More?