Your free UPI payments may not stay free

Every time you scan a QR code at your sabziwala or pay a bill on a payment app, that transaction costs the merchant nothing — and you nothing. The government is now looking at changing that, by bringing back small fees on digital payments (called MDR). These fees were scrapped in 2020 to push UPI adoption. Now, with hundreds of crores of transactions happening every day, the Centre is reconsidering which payment types should stay free.

No exact number is confirmed yet — but in other countries, these fees typically range from 0.5% to 2% per transaction.

What this means for you

• Merchants may quietly pass on these costs — expect small price bumps at local shops rather than big retailers who can absorb it.
• If you pay ₹10,000/month via UPI, even a 1% charge passed on adds ₹100/month to your spending.
• Person-to-person transfers — sending money to family or friends — are likely to stay free. This mainly affects paying merchants.

What you can do

• Nothing urgent right now — this is still being decided. Watch for any new charges appearing on payment apps over the next few months.
• If charges do arrive, add a small buffer of ₹100–200/month to your household budget for digital payment costs.

You're already ahead just by knowing this before it quietly shows up on your payment screen. 🌱