UPI Transactions May Attract Charges, Government Yet to Finalise Fee Structure

Guwahati, Aug 8 : UPI transactions in India may attract charges in the future following the passage of legislation in Parliament. However, the government has not yet finalised the fee structure or announced how much customers or businesses may have to pay for different types of UPI transactions.

Union Finance Minister Nirmala Sitharaman said the government would take a decision on the applicable charges as well as the date from which the new system would come into effect. The details are expected to be finalised based on further directions from the government.

At present, users do not have to pay a Merchant Discount Rate (MDR) for UPI payments. Banks and businesses have generally been able to offer UPI payment services without directly charging customers.

The introduction of MDR on UPI transactions has been discussed for several years. Payment industry bodies and UPI service providers have previously sought a mechanism to recover the costs involved in providing digital payment services.

Under the provisions mentioned in the report, the newly passed legislation allows charges to be introduced for UPI transactions. However, the exact rate and applicable transaction categories have not yet been announced.

For now, UPI users continue to make payments without an MDR being directly charged to them. Any change to the existing system will depend on the government’s decision regarding the fee structure and implementation date.