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 stay free of charge.

The change targets larger transactions only. It marks a shift from the current no-fee structure. The new rate applies only to qualified transactions over Rs 2,000. Consumers are not charged the fee, according to reports. The fee applies to payments from people to merchants, not to all UPI transactions.

The government and the central bank have weighed the move for some time. The idea is to make large digital payments sustainable. Banks and payment firms have repeatedly sought such a charge. The current system has no charge on most UPI transactions. A fee on larger merchant payments would alter the landscape. The reported rate is below earlier estimates. It remains unclear whether the fee will be phased in. Consumers using UPI for small purchases should not notice any change.