UPI Transaction Charges in India: Latest Rules & FAQs (2026)
UPI (Unified Payments Interface) is widely used in India—and for most users, UPI transactions are free. However, there are a few important exceptions you should know about.
Quick Summary
- Person-to-person (P2P): Free
- Person-to-merchant (P2M): Usually free for users
- UPI Lite: Free (within limits)
- Credit card on UPI: Charges may apply
- GST: Not charged to users on normal UPI payments
Are There Any UPI Transaction Charges?
Normal UPI (Bank Account to Bank Account)
- ₹0 charges for users
- Applies to:
- Mobile-to-mobile payments
- UPI ID transfers
- QR code payments
- Bank account to bank account
Banks and apps do not charge customers for these transactions.
Merchant Payments & MDR
- Merchants may pay MDR (Merchant Discount Rate) in some cases
- Customers do not pay MDR
MDR is not deducted from your account as a user.
UPI Charges You Should Know About
Credit Card on UPI (RuPay Credit Card)
- Charges may apply for certain merchant transactions
- Typically applicable for high-value or specific merchant categories
- P2P payments via credit card are not allowed
Exact charges depend on card type and merchant category.
UPI Lite
- No per-transaction charges
- Works for small-value payments
- No PIN required (within limits)
Failed or Reversed Transactions
- No charges for failed UPI transactions
- Amount is usually auto-reversed
UPI Transaction Limits (For Context)
- Per transaction: Usually up to ₹1 lakh
- Daily limit: Bank/app dependent
- UPI Lite: Lower limits for quick payments
FAQs – UPI Transaction Charges
Q1. Is UPI free in 2026?
A. Yes, for regular bank-to-bank payments, UPI is free.
Q2. Will banks start charging for UPI?
A. As of now, users are not charged. Any change would be officially notified.
Q3. Is GST charged on UPI payments?
A. No GST is charged to users for normal UPI transactions.
Q4. Do apps like PhonePe, Google Pay, Paytm charge fees?
A. No, they do not charge users for standard UPI payments.
Tips to Avoid Any Charges
- Use bank account–linked UPI, not credit card
- Check transaction summary before confirming
- Keep UPI apps updated
Conclusion
For most users, UPI transactions are completely free in India. Charges may apply only in limited cases like credit card usage on UPI, while everyday payments remain cost-free.
