India Opens Door to UPI Merchant Fees as July Transactions Hit ₹29.88 Trillion
Updated
Updated · TechCrunch · Aug 4
India Opens Door to UPI Merchant Fees as July Transactions Hit ₹29.88 Trillion
3 articles · Updated · TechCrunch · Aug 4
Summary
New legislation creates the legal basis for charging merchants on some UPI payments, potentially ending the zero-MDR regime that has kept business acceptance free since 2020.
₹29.88 trillion across 23.66 billion July transactions underscores why the shift is being considered: banks and fintechs say surging volumes have made state-backed funding and free merchant payments harder to sustain.
The law does not set fees or define which transactions would be charged, though officials are reportedly considering limiting any levy to larger merchants and higher-value payments.
₹50 billion to ₹100 billion in annual revenue could be generated by fiscal 2028, Jefferies estimates, if 15-30 basis point charges are applied to higher-value UPI transactions.
PhonePe and Google Pay, which handle nearly 80% of UPI volumes, could gain from a new revenue pool, though the impact will depend on how fees are split across the payments ecosystem.