From The Economic Times · ET Bureau · · 1m
UPI fee could recover up to Rs 15,000 crore annually
NPCI chief says 0.4% UPI fee may recover ₹13,000-15,000 crore yearly without charging customers.
In brief
NPCI chief says 0.4% UPI fee may recover ₹13,000-15,000 crore yearly without charging customers. NPCI plans to charge 0.4% merchant fee on UPI transactions to recover ₹13,000-15,000 crore annually while keeping most transactions free. Originally reported by The Economic Times.
NPCI proposes 0.4% UPI fee
NPCI chief Dilip Asbe said the proposed 0.4% merchant discount rate on UPI transactions could recover ₹13,000-15,000 crore annually in the first year.
“the proposed 0.4% merchant discount rate (mdr) on unified payments interface (upi) transactions could help recover ₹13,000-15,000 crore of the payment system's estimated ₹21,000 crore annual cost in its first year”
Most transactions remain free
96% of UPI transactions and 75% of transaction value would stay outside the fee framework, keeping most transactions free.
“96% of u p i transactions and 75% of transaction value would remain outside the mdr framework”
Fee burden minimal for small businesses
The levy won't burden small businesses or customers significantly, as 80% of the fee pool comes from merchants already using credit cards.
“about 80% of the mdr pool would come from merchants that already accept credit cards and pay similar charges”
Fee recovery targets market growth
NPCI aims to recover ₹13,000-15,000 crore to incentivize market players to reinvest and grow UPI.
“we thought r s 13 000 to 15 000 crore could be a reasonable value in year one to recover from the ecosystem”
Reinstating fees after six years
Reintroducing fees after six years of zero MDR would cause pain but is necessary as UPI growth and investments slow.
“reinstating charges after six years of zero mdr would cause some pain but it has become necessary as investments and u p i growth slow”
The bottom line
NPCI plans to charge 0.4% merchant fee on UPI transactions to recover ₹13,000-15,000 crore annually while keeping most transactions free.
