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 be charged to consumers. Smaller UPI payments keep their no-fee status.

The change focuses only on bigger transactions. It marks a shift from the current no-fee structure. The new rate applies only to payments that surpass the Rs 2,000 mark. Consumers are not charged the fee, according to reports. The fee applies to person-to-merchant payments, not to all UPI transactions.

The government and the central bank are considering the move for some time. The idea is to support the payments ecosystem. Banks and payment firms have repeatedly sought such a charge. The current system has a zero-cost model for most users. A fee on larger merchant payments would alter the landscape. The reported rate is lower than some had expected. It remains unclear how quickly the charge will roll out. Consumers using UPI for small purchases will see no difference.