All person-to-person UPI transactions will remain free regardless of amount. Sources in the government said that UPI will continue to be free for customers. Sending money to friends, paying at shops or scanning a QR code will remain free of any charges. Sources also said that vendors earning up to one lakh rupees per month via UPI QR codes will continue to attract zero charges. They informed that all RuPay Debit Card linked UPI transactions will also continue to remain free of any charge.
As per the sources, around 96 per cent of person-to-merchant (P2M) UPI transactions will remain unaffected however transactions above two thousand rupees in essential sectors such as railways, fuel and others will attract a flat Merchant Discount Rate (MDR) of five rupees per transaction. While only large merchant transactions above two thousand rupees will attract a MDR of 0.4 per cent to be borne by merchants.
The sources also said that a dedicated fund will be established to promote UPI adoption among small merchants. An amount equivalent to five per cent of total MDR collections will be contributed to the fund. This fund will support wider UPI acceptance, sustained usage and the inclusion of small businesses in India’s digital payment ecosystem.
The new UPI framework seeks to strengthen the long term sustainability of UPI while keeping payments free for individuals and protecting small merchants.
