India opens door to fees on large payments made via UPI system (updated)

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14/09/2026 21:17

Adds details
By Ashwin Manikandan
Sept 14 (Reuters) - India notified changes in its payments legislation on Monday, specifying that banks cannot impose charges on payments via Unified Payments Interface transactions of up to 2,000 rupees ($20.93).
    The notification altered an earlier provision that prevented banks from charging fees on digital payments via India's popular UPI, paving the way for charges to be imposed on larger transfers.
A final decision on whether to introduce charges, and how they would be levied, has yet to be taken.
    Here are some details:
      
UPI, operated by the National Payments Corporation of India, is the world's largest retail fast-payment system by transaction volume, according to a 2025 ​IMF report. 
The new rule keeps UPI payments of up to 2,000 rupees free of charges.
It paves the way for banks and payment companies to charge on larger UPI payments.
Any fee, if introduced, would be paid by merchants rather than consumers, government officials have previously said.
Banks and payment service providers stand to benefit from a potential new revenue stream. 
Jefferies estimated in August that merchant fees on larger UPI transactions could generate 50 billion rupees to 100 billion rupees annually for the payments industry.
UPI, launched a decade ago, processed 24.51 billion transactions worth 29.82 trillion rupees in August. Google Pay and Walmart's PhonePe accounted for about three-fourths of monthly transaction volumes.
Payments made using debit cards on India's homegrown RuPay network will remain free.
($1 = 95.5500 Indian rupees)

 (Reporting by Ashwin Manikandan in New Delhi and Devika Nair in Bengaluru
Editing by Tomasz Janowski and Nia Williams)
 ((Devika.MadhusudhananNair@thomsonreuters.com))