NPCI seeks industry input on UPI charges for high-value transactions

The National Payments Corporation of India (NPCI) has initiated consultations with banks and payment service providers regarding fee mechanisms for large-value UPI transactions, following legislative amendments approved on Monday that enable commercial charges on payments above ₹2,000.

The consultation process signals the regulator's intent to establish a framework that balances the interests of financial institutions seeking revenue opportunities with the broader objective of maintaining UPI's accessibility and growth momentum. NPCI's engagement with stakeholders is expected to yield recommendations on appropriate fee levels and implementation timelines.

Until now, UPI transactions have been processed on a largely fee-free basis, a policy that has driven the platform's rapid adoption across India. The legislative change permits the introduction of charges for high-value transactions, potentially creating new revenue streams for banks and payment operators that have invested substantially in digital infrastructure.

Industry response to the fee structure will be crucial in determining how swiftly the new framework is implemented. The consultation phase is likely to address concerns about potential impacts on transaction volumes and merchant participation, particularly among smaller businesses that may be sensitive to increased costs.

The NPCI's approach suggests the regulator intends to introduce any new fee regime gradually and with sufficient industry consensus, ensuring the changes do not disrupt the UPI ecosystem that has become central to India's digital payments landscape.