India Brings Merchant Fees to Popular UPI Payment System
For six years, India’s United Payments Interface (UPI) has been free for everyone involved, but that’s reportedly about to change. Reuters reported Wednesday (Sept. 16) that India is set to begin charging merchants a 0.4% fee on transactions of more than 2,000 rupees ($21), known as the merchant discount rate (MDR), though person-to-person transfers remain free. The MDR is […] The post India…
India is set to introduce a 0.4% fee on merchant transactions using its popular UPI payment system, which has been free for six years, according to Reuters. The Merchant Discount Rate (MDR) will apply to transactions exceeding 2,000 rupees ($21), while person-to-person transfers will remain free. The government claims the MDR will help sustain UPI and expand its reach in rural areas, but critics worry that merchants may pass the fees onto consumers.
UPI, which processes 24.5 billion transactions worth 29,823 billion rupees for 550 million users, holds an 84% market share in India's digital payments and 49% globally. PhonePe and GooglePay, backed by Walmart, control around 80% of UPI transactions by value. The MDR is scheduled to commence on Oct. 15, but some merchants may stop accepting payments above 2,000 rupees and encourage cash payments.
Written by urgent.news from PYMNTS's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
