GoKawiilNPCI to charge 0.4% merchant fee on UPI transactions above ₹2,000 from October 15
India's National Payments Corporation announced that starting October 15, merchants will pay a 0.4% fee on UPI transactions exceeding ₹2,000, capped at ₹300 for payments of ₹75,000 or more. Consumers will still use UPI for free, and small merchants earning up to ₹100,000 monthly through UPI, along with transactions of ₹2,000 or less, are exempt. Certain sectors like railways, telecom, insurance and fuel will instead pay a flat ₹5 fee on larger transactions.
GoKawiil's interpretation of the reporting above, not reported fact.
This ends five years of zero-cost merchant processing on UPI, a system handling over 24 billion transactions worth roughly $312 billion monthly, signaling a push to make the network financially sustainable rather than reliant on government subsidies. The change could reshape incentives for merchants who have benefited from fee-free digital payments, potentially nudging some back toward cash or card alternatives for bigger purchases, while still preserving UPI's dominance for everyday small transactions.
- UPI will charge merchants 0.4% on transactions above ₹2,000 starting October 15, capped at ₹300.
- Consumers remain unaffected and continue using UPI free of charge for all transaction sizes.
- Small merchants with monthly UPI receipts under ₹100,000 and sectors like railways and fuel get special exemptions or flat fees.
Source: techcrunch.com — Jagmeet Singh, 2026-09-15
Published there as: “India ends free ride for larger transactions on its ubiquitous digital payments network”
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