- UPI remains free for consumers since its 2016 launch, with no transaction charges
- Small merchants, including kirana stores, do not pay MDR for accepting UPI payments
- UPI's growth raises focus on sustainable funding for its secure, large-scale infrastructure
Amid growing debate over charges for UPI transactions, the Payments Council of India (PCI) has sought to clear the air, saying consumers and small merchants will continue to use the digital payments platform without transaction charges.
In a post on X, the industry body said UPI has remained free for consumers since its launch in 2016 and that there is currently no charge for small merchants, including kirana stores, to accept UPI payments.
There has been considerable discussion around UPI and merchant charges. Here are the facts behind the conversation what it means for consumers, merchants, and India's digital payment ecosystem.
— PCI - Payments Council of India (@PCIUpdates) August 7, 2026
1. Will I have to pay to use UPI?
No. UPI has always been free for consumers since…
Will consumers have to pay to use UPI?
No. According to PCI, UPI has been free for consumers since its launch in 2016. Indians can continue making instant digital payments without paying transaction charges.
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Will small merchants be charged for accepting UPI?
No. Small merchants, including kirana stores, are not required to pay merchant discount rate (MDR) charges for accepting UPI payments, PCI said. It added that protecting small merchants remains central to the growth of India's digital payments ecosystem.
Why is there a debate over UPI charges now?
PCI said UPI has evolved from a new payment platform into the world's largest real-time payment system. With transaction volumes surging, the focus is now on how to sustainably fund the infrastructure supporting billions of secure transactions while protecting consumers and small merchants.
Who built and continues to invest in UPI?
Banks, payment companies, fintech firms, NPCI and the Reserve Bank of India have collectively invested in UPI's technology, cybersecurity, fraud prevention, innovation and customer support for nearly a decade, PCI said.
If UPI is free, who pays for its operation?
The costs of running the payment infrastructure—including cybersecurity, fraud prevention, compliance, technology and customer support, are currently borne by ecosystem participants such as banks and payment service providers.
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Would consumers pay if large merchants are charged?
No. PCI said merchant service charges, wherever applicable, are commercial arrangements between merchants and payment service providers. Such charges do not mean consumers would have to pay for using digital payments.
Why is sustaining UPI important?
PCI said UPI has become critical national digital infrastructure, used by hundreds of millions of Indians every day. As transaction volumes rise, continued investment in security, resilience, fraud prevention, innovation and infrastructure will be crucial to keeping the system reliable.
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