Now Reading: Govt rules out review of UPI fee on merchant payments above Rs 2,000
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Govt rules out review of UPI fee on merchant payments above Rs 2,000
The government has ruled out a review of the UPI transaction fee on merchant payments above Rs 2,000, sources told NDTV Profit. The decision comes amid concerns from merchants and industry bodies…
The government has ruled out a review of the UPI transaction fee on merchant payments above Rs 2,000, sources told NDTV Profit. The decision comes amid concerns from merchants and industry bodies about the impact of the new fee structure, which imposes a charge on payments exceeding Rs 2,000 made through UPI.
The government expects UPI transaction volumes to continue increasing next year despite the introduction of the new fee framework, according to the sources. The fee, which applies to merchant transactions above Rs 2,000, is part of efforts to make the UPI ecosystem more sustainable.
Industry stakeholders had sought a review of the charge, arguing it could slow adoption. However, the government appears confident that the growing use of digital payments will outweigh the impact of the new fee, with no immediate plans to revisit the policy.
Indian Opinion Analysis
The government's decision not to revisit the fee signals its push to make UPI commercially sustainable without burdening small merchants, who make up a large share of digital payments. Under the current framework, the fee applies only to transactions above Rs 2,000 made via UPI to business accounts. The National Payments Corporation of India had proposed the interchange fee in 2023 to help banks and payment apps recover costs. The government's stance will be tested in the coming quarters, with transaction volume growth expected to slow if merchants pass on the charge to customers.
The next indicator to watch is the monthly UPI transaction data from NPCI, which will show whether the fee has affected growth.
Source: ndtvprofit.com
This brief was synthesised by AI from the source linked above.
