From Pymnts · PYMNTS · · 1m 10s
India ends free ride for UPI merchants
After six years of zero fees, India's massive digital payment system will charge merchants on larger transactions.
In brief
After six years of zero fees, India's massive digital payment system will charge merchants on larger transactions. India's UPI will charge merchants 0.4% on transactions over 2,000 rupees starting October 15, ending six years of zero fees. Originally reported by Pymnts.
UPI's free era ends
India will charge merchants 0.4% on UPI transactions over 2,000 rupees ($21) starting October 15. Person-to-person transfers stay free.
Supporting the payment ecosystem
The merchant discount rate isn't a tax. It's distributed among banks and payment apps to support UPI's operation and expansion.
UPI's massive scale
UPI processed 24.5 billion transactions last month for over 550 million users. It holds 84% of India's digital payments by volume and 49% of global real-time payments.
PhonePe and Google Pay dominate
Walmart-backed PhonePe and Google Pay together held around 80% market share by value of UPI transactions last month.
Critics fear unintended consequences
While merchants can't pass fees to consumers, critics worry they'll stop accepting UPI for transactions above 2,000 rupees and demand cash instead.
Why payment choice matters
21% of U.S. consumers abandoned online carts in the past month when their preferred payment method wasn't available. That's nearly 56 million shoppers.
Here's the gist
India's UPI will charge merchants 0.4% on transactions over 2,000 rupees starting October 15, ending six years of zero fees.
