India is introducing fees on large UPI payments. A merchant discount rate of 0.4% will apply to some person-to-merchant payments above Rs 2,000. Reports say the fee will not hit consumers. Smaller UPI payments keep their no-fee status.

The change targets larger transactions only. It marks a change from the current no-fee structure. The new rate applies only to eligible payments above the Rs 2,000 threshold. Consumers are not charged the fee, based on current reporting. The fee applies to payments from people to merchants, not to all UPI transactions.

The government and the central bank have been discussing the move for some time. The idea is to make large digital payments sustainable. Banks and payment firms have repeatedly sought such a charge. The current system has no charge on most UPI transactions. A fee on larger merchant payments would change that. The reported rate is below earlier estimates. It remains unclear how quickly the charge will roll out. Consumers using UPI for small purchases will see no difference.