For millions of Indians, scanning a QR code has become the simplest way to pay. But after Parliament cleared a Bill that gives the government the power to allow charges on digital payments, consumers are asking a simple question - will they have to pay for using UPI?
Not for now. The government has said person-to-person UPI payments will remain free and any future charge would be limited to selected merchant transactions. No new UPI charge has been notified yet. The Lok Sabha passed the Taxation and Other Laws (Amendment) Bill, 2026, on August 6, creating the legal framework for changing the existing zero-charge system.
The important point is that the customer does not directly pay for most digital payment methods. In many cases, the cost is borne by the merchant or the bank.
UPI: Free for now
UPI remains free for ordinary users. It processed 23.2 billion transactions worth nearly Rs 30 lakh crore in May 2026, showing how deeply it has entered everyday spending.
The proposed change is mainly about merchants. If a charge is introduced above a certain threshold, a shopkeeper or online seller would initially bear it. Whether some merchants eventually pass that cost to customers remains uncertain.
Cards cost merchants more
Debit and credit cards already have charges built into the system. For debit cards, the Reserve Bank of India has capped the charge paid by merchants at 0.4% for small merchants using a card machine and 0.3% through QR. For larger merchants, the caps are 0.9% and 0.8%, respectively. Merchants are not allowed to pass the debit-card charge directly to customers.
Credit-card charges are generally higher (1.5-3%) and are negotiated between banks, card networks and merchants. Charges are borne by merchants, but small merchants can pass on the burden to end-users.
Bank transfers: NEFT is free, RTGS is not
For a savings-account customer, online NEFT is free. RBI has specifically directed banks not to charge savings-account customers for NEFT transfers made online.
RTGS, used mainly for large transfers of Rs 2 lakh and above, can cost up to Rs 25 for transfers between Rs 2 lakh and Rs 5 lakh and Rs 50 for transfers above Rs 5 lakh, excluding taxes. Banks can charge less.
IMPS charges vary from bank to bank and are generally higher than UPI or online NEFT.
What should consumers do?
For routine payments, there is little reason to change behaviour yet. UPI remains free, while online NEFT is also free for savings-account customers.
The bigger issue is what happens if UPI charges are eventually introduced. A carefully designed system could keep small payments free while charging larger merchants. That would protect everyday users while giving banks and payment companies a way to recover the cost of running and upgrading the system.