World · India Bureau
Government Stands Firm on UPI Merchant Fee, Rules Out Reversal
India's government has confirmed it will not rollback its decision to introduce a new fee structure for high-value UPI transactions, despite industry concerns. A 0.4 percent merchant discount rate will apply to select payments above ₹2,000 from October 15.
LSN India ·
The government has made clear its resolve to implement the controversial UPI merchant fee structure without any reversal of the policy, signalling it considers the decision final.
From October 15, a new charge framework will take effect for larger merchant payments processed through the Unified Payments Interface. Transactions exceeding ₹2,000 on select merchant categories will attract a 0.4 percent merchant discount rate, or MDR.
Crucially, the fee burden will fall on merchants rather than end consumers, a distinction officials have emphasised as the policy aims to balance the fintech ecosystem's sustainability with affordability for ordinary users.
The announcement comes as various business groups and fintech stakeholders had raised objections to the fee introduction, citing potential impact on adoption rates and small trader operations. However, government sources have indicated the policy framework has been carefully calibrated and remains non-negotiable.
The implementation represents a significant shift in India's approach to UPI economics, which has until now remained largely transaction-fee exempt for users, contributing to its rapid adoption across the country.