From Yahoo Finance · · 1m 20s
India adds fees to big UPI payments for first time
India's payments regulator will charge 0.4% on digital transactions over $20.80 starting October, marking a major shift for the free payment system.
In brief
India's payments regulator will charge 0.4% on digital transactions over $20.80 starting October, marking a major shift for the free payment system. India is introducing its first-ever fees on high-value UPI payments to fund system improvements, while protecting small merchants and rural users from charges. Originally…
India charges for big digital payments
Starting October 15, India's NPCI will charge a 0.4% fee on UPI transactions over 2,000 rupees, or about $20.80. This is the first time the free payment system has introduced charges.
UPI handles massive transaction volume
UPI processed 24 billion transactions worth $311 billion in August alone, making it one of the world's largest digital payment systems by volume.
Fees vary by merchant type
Railways, telecom, insurance, and fuel merchants pay a flat 5-rupee fee. General merchants face 0.4% charges capped at 300 rupees on transactions over 75,000 rupees. Capital markets pay just 0.02%.
Small merchants and rural areas exempt
Merchants earning up to 100,000 rupees monthly through UPI QR codes won't pay fees. QR-code transactions in rural and semi-urban areas also remain free.
Revenue funds system improvements
NPCI says fee revenue will support system resilience, technology innovation, cybersecurity, and customer service. Banks must ensure merchants don't pass charges to customers.
“A fair and appropriate distribution of MDR across ecosystem participants will support continued investment in technology, infrastructure and acceptance networks.”
What it means
India is introducing its first-ever fees on high-value UPI payments to fund system improvements, while protecting small merchants and rural users from charges.
