India govt stands firm on UPI merchant fee framework despite concerns

The government has made clear its intention to maintain the recently introduced fee structure for Unified Payments Interface transactions on merchant payments exceeding Rs 2,000, rejecting any prospect of reviewing the framework in the near term.

Official sources indicated that the decision reflects the administration's commitment to sustaining the new fee mechanism despite concerns from certain quarters of the merchant community and payment service providers. The government believes the framework strikes an appropriate balance between system sustainability and operational viability.

Authorities remain optimistic about UPI's growth trajectory, with projections suggesting transaction volumes will expand further during the next fiscal year despite the fee introduction. The confidence stems from the payment infrastructure's deep penetration across Indian markets and its continued adoption among consumers and businesses.

The fee structure was introduced as part of efforts to address sustainability concerns within the digital payments ecosystem. Officials maintain that the framework will not significantly impede the broader adoption of digital payment modes across the country, particularly given UPI's entrenched position in India's financial infrastructure.