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Technology

UPI is and will remain free for all Indian consumers: PhonePe CEO Sameer Nigam

hellohimachalse@gmail.com 08 Aug 2026 54 min ago

UPI payments will remain free of cost for everyday users, PhonePe co-founder and CEO Sameer Nigam has clarified, stepping in to address growing confusion after a new tax amendment bill cleared the Lok Sabha.

Taking to X on Saturday afternoon, Nigam wrote, “UPI is and will remain free for all Indian consumers!” He further stressed that people using UPI to make payments “Consumers will NOT BE CHARGED anything for making UPI payments.”

His statement comes at a time when there’s been mounting chatter around a proposed Merchant Discount Rate (MDR) that could apply to certain UPI transactions. Naturally, this sparked concern among users wondering if India’s most popular digital payments system might soon come with a price tag attached for consumers.

Backing up Nigam’s clarification, the Payments Council of India (PCI) also weighed in on Friday, stating clearly that UPI would continue to be free for consumers, and that small merchants would be exempt from paying MDR on UPI transactions.

The industry body explained on X, “Merchant service charges, where applicable, are commercial arrangements between merchants and payment service providers. They do not mean that consumers pay to use digital payments.”

According to PCI, any charges that eventually come into play would be settled between merchants and payment service providers as part of business arrangements, not something deducted directly from a consumer’s pocket.

So, will UPI start costing users money?

Simply put, no. Both Nigam and the PCI have made that much clear.

The real debate right now is centred around whether an MDR could be introduced on specific business-related electronic payments. Through the Taxation and Other Laws (Amendment) Bill, 2026, the government now has the authority to impose MDR on select digital payment methods.

For business-directed UPI transactions exceeding Rs 2,000, the proposed MDR range being discussed sits between 0.25% and 0.4%.

Importantly, regular person-to-person UPI transfers won’t fall under this proposed charge – meaning it’s designed to apply specifically to merchant or business transactions, not individuals simply sending money to friends or family.

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