UPI now processes over 500 million transactions a month, with more than 95 % of them valued under ₹2,000, leaving most payments untouched by the new fee.
NPCI’s September notification set a 0.4 % charge for merchant‑to‑consumer UPI payments exceeding ₹2,000, capped at ₹300 for transactions above ₹75,000, while person‑to‑person transfers remain free.
RBI Governor Sanjay Malhotra told reporters that a modest fee would not dent transaction volumes, but merchants warn the cost could squeeze margins on small‑ticket sales.
The news triggered an immediate sell‑off: Paytm shares slid 7.6 %, Mobikwik fell 7.2 %, and analysts flagged the delay as a hit to the sector’s monetisation narrative.
The amendment to the Payment and Settlement Systems Act, approved in August 2023, formally authorised MDR on UPI, but the government has kept consumer‑side fees at zero. The Ministry’s final notification is expected by mid‑January, after which merchants will need to re‑engineer their POS systems.