NPCI CEO flags UPI charge pass-through risk for about 10% of merchants
NPCI CEO Dilip Asbe said a proposed UPI charge framework would leave most transactions and small merchants unaffected, though roughly 10% of merchants may pass incremental costs to consumers. The comments underscore the need for sustainable funding of digital-payments infrastructure.
What happened
NPCI CEO Dilip Asbe outlined UPI’s proposed charge framework, saying most transactions and small merchants would remain unaffected. He said roughly 10% of
Key facts
- Around 10% of merchants may pass additional charges to customers
Why this matters
Payment providers and merchant platforms may gain partnership opportunities by helping cost-exposed merchants optimize UPI acceptance, pricing, and value-added services.
What to watch
- NPCI, RBI, or Ministry of Finance publication of a formal UPI charge, MDR, interchange, or subsidy framework.
- Clarification of merchant-size thresholds, transaction-value thresholds, category exemptions, and whether consumer-facing surcharges are permitted.
- Changes to the government's UPI incentive program or bank/payment-service-provider reimbursement levels.
- Announcements by major payment aggregators, acquirers, and large retailers regarding revised UPI pricing or merchant contracts.
- UPI transaction-volume growth, failed-transaction rates, and signs that banks or PSPs are reducing support for low-value merchant acceptance.
- Consumer or political backlash to convenience fees, especially for essential retail, fuel, transit, and small-ticket purchases.
- Model UPI acceptance-cost exposure by merchant size, transaction value, category, and current MDR/payment-processing mix.
- Prepare pricing and checkout contingencies for any permitted surcharge, including compliant disclosure, customer messaging, and low-ticket transaction treatment.
- Accelerate negotiations with acquiring banks, payment aggregators, and QR/payment gateway providers for volume-based rates and blended payment acceptance contracts.
- Track whether competitors introduce UPI minimum basket values, discounts for alternate payment methods, or selective convenience fees.
- Prioritize payment-routing capabilities that can optimize between UPI, cards, wallets, and bank-transfer rails without disrupting conversion.