India is introducing fees on large UPI payments. A merchant discount rate of 0.4% will be applied 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 only affects larger payments. 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, as reports indicate. The fee applies to payments from people to merchants, 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 pushed for such a charge. The current system has no charge on most UPI transactions. A fee on larger merchant payments could reshape the market. The reported rate is lower than some had expected. It remains unclear when the fee will start. Consumers using UPI for small purchases will see no difference.