NPCI sets 0.4% fee on UPI merchant payments above ₹2,000, effective Oct 15 | Finance News
India’s payments authority said on Tuesday a 0.4 per cent fee would be levied on transactions worth more than ₹2,000 (about $20) made to merchants via the homegrown UPI network starting October 15.
The charges will be distributed among the firms facilitating the transactions and are being introduced to bolster investment into infrastructure resilience, innovation, cybersecurity and customer service, the National Payments Corporation of India said in a release.
This comes after India changed its payments legislation on Monday, allowing firms to charge transactions of more than ₹2,000. All payments using the Unified Payments Interface have been free so far.
The move is expected to benefit banks and payments firms in Asia’s third-largest economy, which posted 24 billion UPI payments totalling $311 billion in August.
The NPCI also said payments made via UPI to specific merchants such as railways, telecom services, insurance and fuel, among others, will attract a flat fee, called merchant discount rate (MDR), of ₹5.
For other merchants, the fee on transactions above ₹75,000 will be capped at ₹300.
“Merchants on-boarded cannot pass on MDR charges to customers while accepting payments through UPI,” the NPCI said.
The NPCI had met with lenders and payments firms earlier in the day to discuss levying charges on large transactions in the world’s largest retail fast-payment system, Reuters had reported.
