India To Charge Merchants 0.4% Fee On UPI Payments Above $20

According to CNBC, India’s National Payments Corporation of India said merchants will be charged a 0.4% fee on UPI payments above 2,000 rupees ($20.84), with the fee capped at 300 rupees per transaction for payments above 75,000 rupees. Person-to-person UPI transfers will remain free, and the charge is lower than the 0.9% fee on debit card transactions and the 1.5% to 2.5% fee on credit cards. The move has drawn support from some fintech companies, including Amazon Pay, WhatsApp Pay and Paytm, while critics including former BharatPe CEO Ashneer Grover and India’s opposition Congress party have attacked the decision. The Indian government had cut the merchant discount rate on UPI to zero in 2020 to promote digital transactions, and UPI transaction value has since risen 10-fold to 213 trillion rupees over roughly six years ending January 2025. NPCI data for September showed UPI processes more than 1.1 million transactions every two minutes on average. In January, the Indian government said UPI had surpassed Visa in daily transaction volumes and accounted for 85% of digital payments in India and 50% globally. The U.S. Trade Representative’s office said earlier this year that India’s electronic payments policies appear to favor domestic suppliers over foreign suppliers, creating a non-level playing field.