Banking panel to set UPI merchant charges for high-value transactions

A steering committee comprising 22 representatives from banks, payment service providers and industry associations is poised to establish merchant charges for Unified Payments Interface transactions above ₹2,000, according to sources familiar with the matter.

The UPI & Services Steering Committee, which includes representatives from the Indian Banks' Association and Payments Council of India, will base its decision on factors including system sustainability and growth prospects for the digital payment ecosystem.

The move comes after the government announced Monday that UPI transactions up to ₹2,000 between individuals and merchants would remain free of charge. All peer-to-peer UPI transfers will continue without fees under a gazette notification dated September 14.

Industry observers note that comparable digital payment systems globally impose varying merchant rates. Brazil's PIX ecosystem charges approximately 0.33 per cent on merchant transactions, while China's system levies around 0.40 per cent. The Indian committee's determination of the Merchant Discount Rate for transactions above ₹2,000 will help balance merchant incentives with the broader expansion of the UPI network across the country's digital economy.