PhonePe CEO: UPI Remains Free for Consumers in India

PhonePe CEO Sameer Nigam recently confirmed that Unified Payments Interface (UPI) payments will remain free for all Indian consumers. This statement, shared on X, directly addresses growing concerns about potential transaction fees.

The clarification follows the Lok Sabha’s approval of the Taxation and Other Laws (Amendment) Bill, 2026. This bill grants the government specific authority to determine which digital payment methods may incur charges, sparking public discussion on UPI’s future pricing.

Industry Reassurances

The Payments Council of India (PCI) echoed this sentiment, stating consumers would not be charged for UPI usage. Additionally, small merchants would be exempt from Merchant Discount Rate (MDR) for accepting UPI payments.

• The PCI emphasized that merchant service charges are commercial agreements between merchants and payment service providers, not consumer fees.
• A proposal might introduce a 0.25-0.4% MDR on certain business-to-business UPI transactions exceeding ₹2,000.
• Person-to-person payments would remain unaffected by these potential charges.

The Cost of Infrastructure

The PCI highlighted the significant investments made since UPI’s launch in 2016. Banks, fintech companies, NPCI, and the RBI have developed and maintained the national payment infrastructure.

These investments cover critical areas such as technology development, cybersecurity, fraud prevention, and customer support. Reserve Bank of India Governor Sanjay Malhotra acknowledged that while discussions on MDR structure are premature, the operational costs cannot be ignored indefinitely.

He noted that ultimately, someone has to bear the costs of India’s digital payments infrastructure, even if indirectly through the general economy.