No Service Charges on UPI Payments: Government Rejects Fee Proposals

• Union Finance Ministry rejects proposals to levy fees on UPI transactions for consumers and small merchants.
• Government allocates Rs. 2,000 crore subsidy in 2026–27 Union Budget to cover bank expenses for UPI and RuPay Debit Card transactions.
• Discussions on high-value UPI transaction fees were set aside, ensuring free transactions for users.
• Banks and fintech companies express concern over bearing processing costs, despite daily UPI transactions exceeding 300 million.
• Industry suggests a 0.2–0.3% fee on digital payments for large merchants (turnover > Rs. 10 crore), currently under RBI review.