India is opening the door to 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 remain free.

The change focuses only on bigger transactions. It marks a departure 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 transactions between customers and businesses, 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 not as high as anticipated. It remains unclear how quickly the charge will roll out. Consumers using UPI for small purchases should not notice any change.