The government has reiterated that there are no plans to impose transaction charges on Unified Payments Interface (UPI) transactions, ensuring that users can continue to make digital payments without any cost.
UPI, operated by the National Payments Corporation of India (NPCI), has transformed digital payments in India. While acquiring banks were allowed to levy a Merchant Discount Rate (MDR) of 0.30 per cent under a 2019 circular, Section 10A of the Payment and Settlement Systems Act, 2007, prohibits any charges on payers or beneficiaries for payments made through electronic modes prescribed under Section 269SU of the Income-tax Act, 1961. UPI and RuPay debit cards are included in these prescribed electronic modes.
Minister of State for Finance, Pankaj Chaudhary, told Lok Sabha that the government has provided incentive support totaling around ₹8,730 crore over the last four fiscal years to ensure the UPI ecosystem remains operational and seamless for users.
UPI adoption has seen exponential growth in recent years. Transaction volumes jumped from 92 crore in FY 2017–18 to 18,587 crore in FY 2024–25, a compound annual growth rate (CAGR) of 114 per cent. The total transaction value soared from ₹1.10 lakh crore to ₹261 lakh crore over the same period.
July 2025 witnessed a new milestone, with over 1,946 crore UPI transactions recorded in a single month. The overall digital payments ecosystem has also grown significantly, with total transaction volumes increasing from 2,071 crore in FY 2017–18 to 22,831 crore in FY 2024–25, and the value rising from ₹1,962 lakh crore to ₹3,509 lakh crore, reflecting a CAGR of 41 per cent.
The government’s statement comes as part of efforts to strengthen digital financial infrastructure and boost financial inclusion, reinforcing UPI as a free, reliable, and widely accessible platform for millions of Indians. It also clarifies that no new charges will be introduced, keeping digital payments affordable and encouraging greater adoption across the country.
