Finance Minister clarifies digital payment fees apply only to merchants

Finance Minister Nirmala Sitharaman recently confirmed that regular customers will not face any new charges for using the Unified Payments Interface. She completely rejected claims suggesting that everyday users would soon carry the financial burden of digital transactions. Instead, she clarified that any upcoming Merchant Discount Rate (MDR) would fall strictly on businesses and merchants rather than end consumers.

Why merchant charges matter

Charging a fee to merchants is a strategic move to help banks and financial technology companies upgrade their systems. Sitharaman explained that collecting this fee gives these institutions the necessary resources to improve payment infrastructure, boost digital security, and fund future innovations. Ultimately, everyday consumers will reap the rewards of a safer and much faster payment network without paying anything out of pocket.

Debunking political rumors

This detailed clarification arrived shortly after Congress leader Jairam Ramesh claimed that a proposed legislative change would strip away the guarantee of free digital transfers for citizens. He suggested that ordinary people would soon have to pay just to use basic digital payment applications. Sitharaman strongly called his statements false and urged critics to review the actual proposals before causing public panic. She noted that the new changes simply empower the central government to decide through proper notifications which electronic payment modes will continue to remain completely free of cost for the general public.

Next steps for legislation

Nothing changes immediately for businesses or daily shoppers. Sitharaman pointed out that authorities have not decided on an official rate yet. A special steering committee, led by the National Payments Corporation of India (NPCI), will evaluate the specific fee structure only after Parliament officially passes the Taxation and Other Laws (Amendment) Bill, 2026. This specific legislation seeks to formally modify Section 10A of the Payment and Settlement Systems Act, 2007. Once lawmakers approve the bill, the committee will hold proper industry consultations to determine the exact merchant rates.