Govt caps UPI merchant fees on transactions above Rs 2,000
Starting October 15, merchants will pay a 0.4% fee on UPI transactions exceeding Rs 2,000. The charge will not apply to person-to-person payments, regardless of the amount. The government has clarified that consumers will not bear this cost.
Sources: yourstory.com
“This move signals regulatory efforts to balance merchant costs while preserving UPI’s consumer-friendly appeal, a contrast to earlier debates on broader UPI fees.”
What it means
The decision reflects a targeted approach to monetizing high-value UPI transactions without disrupting small-ticket or peer-to-peer payments, which dominate usage. It could ease merchant resistance to UPI adoption while keeping the system’s zero-cost advantage for consumers intact. However, the long-term impact on payment volumes and fintech business models remains to be seen, especially if thresholds or rates are adjusted later.
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