India has paved the way for charging merchants a fee on UPI transactions
The Indian government is considering implementing a merchant discount rate (MDR) on large UPI transactions, potentially ending the system's long-standing free-to-use model. While small and peer-to-peer payments will remain free, the move aims to monetize the massive digital payment network.
Why it matters
This represents a significant shift in the business model of one of the world's largest real-time payment infrastructures.
Share Save Add as preferred on Google Soutik Biswas India correspondent NurPhoto via Getty Images A vegetable vendor waits for customers at a market in Kolkata, with a QR code displayed for digital payments For most Indians, paying by Unified Payments Interface (UPI) has become almost absurdly routine.
Scan a QR code, tap a few buttons and the money moves instantly. There is no card machine, no cash, and - most importantly - for the user, no visible fee.
India has paved the way for banks and payment companies to charge merchants a fee on UPI transactions, potentially ending a decade-long experiment in free digital payments.
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