Transactions through UPI and RuPay debit cards may soon have charges. This means that using UPI might no longer be free, and you may have to pay extra. According to a media report, the government is considering a proposal to reintroduce merchant charges on UPI and RuPay debit card transactions. If approved, digital payments will become more expensive.

Details of the Report

According to a report by The Economic Times, the government is preparing to impose merchant charges on UPI and RuPay debit card transactions. In the digital payment industry, the Merchant Discount Rate (MDR) refers to the fee a merchant or shopkeeper pays to start accepting payment services. This fee was waived by the government in 2022. Now, reports are suggesting that the government may consider bringing it back. Currently, there is no MDR applied to UPI and RuPay debit card payments, which are processed by the National Payments Corporation of India (NPCI).

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The Proposal Under Review

The report mentions that a formal request has been made by the banking industry to the central government to reintroduce MDR for UPI transactions, especially for large merchants. The request is being reviewed by the concerned departments. According to the proposal, MDR could be reapplied to merchants with an annual turnover of more than Rs 40 lakh, based on their GST filings. The government may also consider a tiered pricing model for UPI, where larger merchants pay higher fees, while smaller businesses would pay lower fees. UPI payments will remain free for merchants with an annual turnover of less than Rs 40 lakh.

UPI Transaction Data

According to data from NPCI, UPI recorded 16.11 billion transactions in February 2025, totaling around Rs 22 trillion. In comparison, the total number of transactions in January was 16.99 billion.

NPCI Issues New Guidelines for UPI Transactions

The National Payments Corporation of India (NPCI) has issued new guidelines for UPI transactions, which will come into effect from April 1, 2025. According to the new rules, banks will now be required to regularly update their databases. Mobile numbers that have been deactivated or reassigned to someone else must be removed from the list to ensure safer UPI number-based transactions.

Ensuring Safer Transactions

This decision was made in a special meeting held by NPCI. The aim is to make UPI number-based transactions easier and more secure. NPCI has also organized several workshops to raise awareness and warn customers about safe UPI transactions.

Regular Database Updates

Under the new guidelines, banks and Payment Service Providers (PSPs) must update their databases regularly. To do this, digital intelligence platforms will be used, and the updated lists must be submitted at least once a week.