Will UPI payments remain free? RBI Governor clarifies there is no decision yet on Merchant Discount Rate

Reserve Bank of India (RBI) Governor Sanjay Malhotra on Wednesday said it is too early to conclude whether Unified Payments Interface(UPI) transactions will attract a Merchant Discount Rate (MDR), even as the government’s proposed amendments to the payment law have reignited the debate over the future of India’s zero-charge digital payments regime.

Speaking after the Monetary Policy Committee (MPC) meeting, Malhotra said discussions around the Payment and Settlement Systems (Amendment) Bill, 2027 are still underway and the RBI’s immediate focus remains strengthening the country’s digital payments infrastructure rather than deciding how it will eventually be funded.