The fintech industry is working on a proposal to introduce a fee structure for UPI (Unified Payments Interface) transactions, but only for large merchants. The aim is to ensure that regular users can continue making UPI payments for free, without any additional charges.
Currently, UPI transactions are completely free for both users and merchants. However, maintaining the UPI system involves costs, especially for banks and payment service providers. To cover these expenses, the industry is suggesting a new model where only big sellers or large businesses would be charged a small fee, known as the Merchant Discount Rate (MDR), when accepting UPI payments.
This move is being discussed carefully to avoid impacting the widespread use of UPI, which has become one of the most popular ways to make digital payments in India. The goal is to make the system sustainable in the long run without passing any burden onto regular users or small businesses.
Last week, the Ministry of Finance clarified in a social media post that it does not intend to impose any MDR on UPI payments for users. The proposed fee would be strictly for large merchants who can afford to pay and would not affect customers making everyday transactions.
If implemented, this new structure could help support the digital payment ecosystem financially, while keeping UPI usage free and convenient for millions of Indians. The idea is still under discussion and would need approval before becoming official policy.
