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India proposes fees for UPI payments after zero-rate regime

Draft legislation would allow banks and payment providers to charge merchants for processing UPI transactions, ending a six-year zero-fee policy.

·1 min read·2 outlets

The short version

India's government proposed legislation to end a six-year policy of zero merchant fees for UPI payments. The change would allow banks and payment providers to charge merchants for processing digital transactions.

India's government proposed legislation to allow merchant fees for UPI payments.2,1 The current policy, in place since 2020, prohibits merchants from paying fees to accept UPI transactions.2 The proposed change would end the zero-merchant-discount-rate regime for UPI payments.2

Merchant Discount Rate (MDR) is the fee merchants pay to banks and payment service providers for processing digital transactions.1 Credit card payments in India typically attract an MDR of around 1.5%.1 The legislation would create a framework for banks and payment providers to charge merchants for UPI transactions.2

Why it matters

  • UPI (Unified Payments Interface) is India's real-time payment system developed by the National Payments Corporation of India (NPCI), enabling instant bank-to-bank transfers.2

  • The zero-merchant-discount-rate regime was introduced in 2020 to encourage digital payments and reduce costs for merchants.2

This account was written from the 2 reports listed below, filed by 2 independent outlets, and checked against them line by line. It is not a copy of any one of them. Spotted an error? Tell us.

Corroborated2 outlets
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2 reports from 2 outlets. The numbers in the article point here.

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