‘UPI is and will remain free’: PhonePe's Sameer Nigam assures amid growing doubts over MDR Bill

UPI will remain free for consumers, PhonePe CEO Sameer Nigam said amid growing concern over transaction charges on UPI payments.

Google Pay and Walmart-controlled PhonePe together process over 80 per cent of UPI transactions.

Nigam's clarification comes after the Lok Sabha passed the Taxation and Other Laws (Amendment) Bill, 2026, which allows the government to bring back merchant discount rate (MDR) charges on UPI transactions. The move raised questions over whether consumers would eventually be charged for using UPI.

“UPI is and will remain free for all Indian consumers!” Nigam said in an X post. “Consumers will NOT BE CHARGED anything for making UPI payments.”

Nigam's comment comes a day after the Payments Council of India (PCI) clarified that UPI would remain free for consumers. It also noted that small merchants would not be required to pay MDR for accepting UPI payments.

"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," the council said in a post on X.

The industry body said any charges that may apply would be imposed on merchants under commercial arrangements with payment service providers, rather than collected directly from consumers.

The Centre also operates an incentive scheme under which banks are reimbursed for eligible low-value UPI transactions made to small merchants, helping offset part of the cost of processing these payments.

Will you have to pay to use UPI?

No, the government has maintained that UPI is, and will be, free for consumers, as it has since its launch in 2016.

Every Indian can continue making instant digital payments without paying any transaction charges.

Will small shopkeepers/kirana stores be charged for accepting UPI?

No, small merchants are not required to pay any MDR charges to accept UPI payments.

UPI was designed to make digital payments accessible for even the smallest businesses across India, and protecting small merchants remains central to the ecosystem's inclusive growth.

Would consumers have to pay if large merchants covered payment acceptance fees?

No, the merchant service charges, where applicable, are commercial arrangements between merchants and payment service providers. This does not mean that consumers will have to pay to use digital payments.

Across the world, merchant service charges are a standard feature of digital payment ecosystems, while consumers continue to enjoy convenient and secure digital payment experiences.

Why is sustaining the UPI ecosystem important?

UPI has become a critical national digital infrastructure used by hundreds of millions of Indians every day. As transaction volumes continue to grow, sustained investment in security, resilience, innovation, fraud prevention and infrastructure will remain essential to ensure that UPI continues to serve consumers and businesses reliably for years to come.