Paytm CEO Vijay Shekhar Sharma Backs UPI Charges On Large Payments, Calls Move A ‘Robin Hood’ Model

Paytm CEO Vijay Shekhar Sharma supports the implementation of charges on larger UPI merchant transactions, referring to it as a "Robin Hood" strategy that safeguards both small users and merchants. The National Payments Corporation of India (NPCI) recently introduced a 0.4% merchant discount rate (MDR) for person-to-merchant UPI transactions exceeding ₹2,000, effective October 15.

Speaking to DD News, Sharma highlighted that UPI had primarily relied on grant-based support hitherto, with government assistance maintaining the platform's operations. To ensure long-term sustainability, Sharma welcomed the move to charge higher-value transactions, which would keep UPI free for common users and small merchants. He emphasized that this approach was not new, as other payment methods already involved transaction fees, while UPI had remained free until now.

Sharma called the introduction of MDR a "Robin Hood" model, as it would create a sustainable financial structure for UPI while preserving its accessibility for small merchants. The Finance Ministry clarified that the revised UPI framework would not impact person-to-person transactions, which would continue to be free regardless of transaction value. Approximately 96% of person-to-merchant transactions will remain unaffected.

The Reserve Bank of India (RBI) also expressed support for the MDR on large-value UPI transactions, stating that it would strengthen the digital payments ecosystem. The RBI believes that this move will enable UPI to continue scaling, innovating, and serving consumers and businesses across the country.