ET Government reports: NPCI to levy 0.4% fee on select merchant UPI transactions over ₹2,000
What happened
NPCI will introduce a 0.4% Merchant Discount Rate on select person-to-merchant UPI transactions exceeding ₹2,000 starting October 15, subject to a cap. Meanwhile, the central government has protected payments up to ₹2,000 from charges, maintaining zero-fee processing for smaller transfers.
Why it matters
The fee introduces a direct operating cost for merchants processing higher-value digital sales. Keeping smaller transactions fee-free insulates routine consumer spending and micro-merchants from payment processing expenses.
Bigger picture
The policy establishes a monetization model for payment service providers handling larger commercial transfers. It aims to make digital payment infrastructure financially sustainable while preserving free access for everyday transactions.
Watch next
Official NPCI guidelines detailing specific fee caps and eligible P2M transaction categories ahead of the October 15 implementation.