India Introduces Merchant Fees for Larger UPI Transactions
India has introduced a merchant fee on larger transactions processed through its Unified Payments Interface (UPI), marking the end of years of free processing. Starting October 15, merchants will be charged 0.4% on payments exceeding ₹2,000 ($21). The National Payments Corporation of India (NPCI) stated that this change is necessary to make UPI financially sustainable as it processes billions of transactions monthly. The fee structure includes a cap of ₹300 for large transactions and exemptions for small merchants with up to ₹100,000 in monthly UPI volume. Certain sectors like railways and telecom will pay a flat ₹5 per transaction above ₹2,000. The move follows amendments to India's payments law earlier this year that allowed such fees. UPI has become the backbone of India’s digital economy, processing over 24 billion transactions in August alone. While consumers continue using UPI for free, businesses will now face new costs which could affect adoption rates.
Topics: digital payments India's financial policy merchant fees UPI