Tuesday, August 19, 2025
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Government confirms no charges on UPI payments

The government supported UPI with an incentive scheme from FY 2021-22 to 2024-25, allocating Rs 8,730 crore to sustain zero-charge transactions

New Delhi

The Centre has once again clarified that there is no proposal to levy transaction charges on Unified Payments Interface (UPI) based payments. Minister of State for Finance Pankaj Chaudhary made this statement in a written reply in the Lok Sabha on Monday.

UPI transactions are operated by the National Payments Corporation of India (NPCI). While NPCI’s 2019 circular had permitted acquiring banks to charge a Merchant Discount Rate (MDR) of 0.30 percent, the law prevents such charges on users. Section 10A of the Payment and Settlement Systems Act, 2007, ensures that no bank or system provider can impose charges on payers or beneficiaries using prescribed electronic modes. The Central Board of Direct Taxes (CBDT) had earlier notified UPI and RuPay debit cards as such prescribed payment modes.

To support the UPI ecosystem, the government implemented an incentive scheme over four financial years, from FY 2021-22 to FY 2024-25, extending nearly Rs 8,730 crore in support. This measure ensured that digital payment service providers could sustain operations while offering zero-charge transactions to customers.

UPI has grown rapidly since its introduction. The number of transactions rose from 92 crore in FY 2017-18 to 18,587 crore in FY 2024-25, reflecting a compound annual growth rate of 114 percent. In terms of value, transactions increased from Rs 1.10 lakh crore to Rs 261 lakh crore during the same period.

In July 2025 alone, UPI recorded 1,946.79 crore transactions, setting a new monthly record. Overall, India’s digital payments ecosystem grew from 2,071 crore transactions in FY 2017-18 to 22,831 crore in FY 2024-25, highlighting its massive adoption nationwide.

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