UPI Transactions

An SBI official says the UPI merchant discount rate could cover the bank's transaction costs and leave a small surplus, while merchants may split payments to avoid the fee

All marketers know that offering something 'free' can act as a customer magnet. This has fascinated behavioural economists

A fee on UPI transactions is economically logical, but it reflects the govt's evolving approach to one of its key political constituencies

NITI Aayog's former vice-chairman Rajiv Kumar on Monday suggested the government to continue with zero-fee UPI transactions for at least a few more years until the currency-to-GDP ratio shows some tendency to decline, and then review the situation. Kumar told PTI that he is not in favour of charging any fee from merchants for using UPI for any transaction value, and the government should treat it as a public good with extensive positive externalities. "Their overall benefits well far outweigh the cost of Rs 20,000 crore that the public exchequer has to bear for maintaining the UPI infrastructure. "...so let's continue with zero-fee UPI transactions for at least a few more years until the currency-to-GDP ratio shows some tendency to decline," he said. While 96 per cent of unit transactions are less than Rs 2,000, it is estimated that nearly 66 per cent of transactions by value are above this level. "This presents a very significant opportunity for transactions to shift back to cash

Apple Pay could launch in India as early as October with credit card support, entering a market dominated by UPI. Here is an explainer on what is Apple Pay and how it could work

Merchants receiving up to ₹1 lakh a month in eligible UPI QR payments remain outside the new MDR regime, but repeated breaches can trigger reclassification to P2M

Proposal needs Sebi representation, followed by RBI, govt nod

Congress says no specific UPI fee proposal was discussed by the finance panel, disputing the government's claim of MPs' support

Brokers in discussion with the market regulator as the charge raises operational cost

Assocham said the new UPI MDR framework for high-value merchant payments will support investment in technology and infrastructure, while helping expand UPI acceptance across the country

India's remittance flows are rising, but high transfer costs and limited UPI links show the need for wider cross-border payment connectivity

New UPI MDR rules will apply to select merchant transactions, but consumers can continue using UPI for daily payments, QR payments and AutoPay without transaction charges

MPs, mostly belonging to the Opposition, on Wednesday expressed concern over the government's decision to levy a fee on UPI payments above Rs 2000 to merchants, claiming that the entire population of the country would be affected due to the "anti-people" move. Chairman of the Parliamentary Standing Committee on Finance Bhartruhari Mahtab said that some MPs raised the issue at the meeting and said that it may be taken up at the next meeting of the panel. RSP MP NK Premchandran, who is a member of the committee, said that the entire population of the country would be affected by the government's decision to levy a fee on payments of above Rs 2000 to merchants. "It is a completely anti-people decision," Premchandran said. Ending nearly six years of fully free UPI payments, the government on Tuesday introduced a 0.4 per cent fee on transfers worth more than Rs 2,000 made to merchants through UPI from October 15, while explicitly ring-fencing everyday person-to-person transactions as we

The government is putting a price for merchants using its flagship digital payment network to accept large transactions - a shift that follows years of warnings from the payment industry that the annual subsidy budgeted for the Unified Payments Interface (UPI) never came close to covering the real cost of running it. From October 15, a 0.4 per cent Merchant Discount Rate (MDR) will apply to person-to-merchant UPI payments above Rs 2,000. The charge will be paid by merchants, not consumers, and will be capped at Rs 300 for transactions of Rs 75,000 or more. Payments between individuals, as well as the vast majority of everyday merchant payments, will remain free. The National Payments Corporation of India, which operates the UPI network, said the revenue will support investment in infrastructure resilience, cybersecurity, fraud prevention, innovation and customer service. "The MDR is distributed only amongst the UPI ecosystem, to further invest into infrastructure resilience, ...

UPI may remain free for investors, but brokers could face a new cost every time customers move money into their trading accounts - even if they never make a trade

UPI payments above ₹2,000 will attract a merchant fee for eligible businesses from October 15. Here's how small shopkeepers can check if the new MDR rules apply to them

Paytm shares rallied 7 per cent to a fresh 52-week high of ₹1,856.50 on the BSE. Mobikwik stock rose by 6 per cent to ₹214. However, Pine Labs slumped 6 per cent to ₹182 per share.

The government estimates about 96% of merchant payments will remain unaffected by the changes. The network processed 24.51 billion transactions valued at 29.9 trillion rupees in August.

In a post on X, the central bank said the move would help UPI continue to scale and innovate while serving consumers and businesses across the country

Sources stress MDR is not a tax on UPI, since the fee is distributed among participants in the payments chain rather than accruing to the government