The Indian government announced on Saturday that users will continue to make UPI payments without transaction charges. However, a nominal Merchant Discount Rate (MDR) could be imposed on a limited set of merchant transactions in the future. This decision comes after the Lok Sabha passed an amendment to the Payment and Settlement Systems Act, 2007, which allows for charging fees on UPI and other electronic payment modes. The government emphasized that Person-to-Person (P2P) UPI transactions will remain completely free, and the majority of merchant transactions will also be fee-exempt. If MDR charges are implemented, they will only apply to a specific threshold of merchant transactions. These charges will be significantly lower than those for debit or credit card transactions. The government aims to amend the act to ensure UPI's long-term sustainability, technological advancement, and resilience against emerging risks. The amendment is necessary to encourage more companies to participate in the digital payments sector, create a self-sustaining revenue model, and increase competition. However, Congress leader Jairam Ramesh expressed concerns that MDR charges, while not directly imposed on consumers, may indirectly be passed on through higher prices or differential pricing. The government has denied allegations of external influence driving the policy changes.