Inside India newsletter: The world’s largest real-time payments system will no longer be free for all
India's digital payment system, which processes more than 1 million transactions every two minutes for free now, will start charging fees to merchants.
TL;DR
- India's UPI system will now charge merchants a 0.4% fee on transactions exceeding 2,000 rupees.
- Person-to-person UPI transactions will remain free.
- Fintech companies largely support the fee, stating it preserves UPI's core model and generates revenue.
- Critics argue the fee undermines UPI as a public good and may favor U.S. companies like PhonePe and Google Pay.
- The introduction of fees contrasts with UPI's previous zero-cost adoption, which led to a tenfold increase in transaction value.
- The move comes amid scrutiny from the U.S. Trade Representative's office regarding perceived favoritism towards domestic payment services.