New Government Notification May Allow Fees on Large UPI Transactions
· Business · Indian Express, Hindustan Times, NDTV
A recent government notification bars fees on UPI payments up to ₹2,000, effectively leaving room for the introduction of a Merchant Discount Rate (MDR) on transactions exceeding that amount. While UPI has operated under a zero-MDR regime since January 2020, the new rule creates a legal framework to charge merchants for larger digital payments. Although the fee would be levied on merchants, industry trends suggest these costs could be passed on to consumers. Data from 2025-26 shows that while transactions above ₹2,000 accounted for only 4% of UPI payments by volume, they represented approximately two-thirds of the total value. Person-to-person transfers remain exempt from these potential charges.
Why it matters
The potential introduction of fees on large UPI transactions could significantly alter digital payment habits for millions of Indian consumers and merchants who currently rely on the free service.
Read the original report — Indian Express
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