NPCI sets 0.4% fee for merchant UPI payments above Rs 2,000

NPCI has introduced a 0.4% charge on merchant UPI transactions above Rs 2,000. A Finance Ministry notification continues to bar banks and payment-system providers from levying charges on UPI payments up to Rs 2,000 and RuPay debit-card transactions.

— Source publishedTue, 15 Sept, 2026, 18:50 IST·First seen Tue, 15 Sept, 2026, 19:04 IST·Source Indian Express · Business

What happened

NPCI announced a 0.4% fee on merchant UPI payments above Rs 2,000, while a Finance Ministry notification bars banks and system providers from charging for UPI

Key facts

  • 0.4% fee
  • Rs 2,000 threshold

Why this matters

Payments providers and merchant-acquiring platforms may gain a new revenue pool in higher-value UPI transactions, making enterprise merchant partnerships and pricing capabilities more strategically valuable.

What to watch

  • NPCI circular details defining effective date, covered merchant categories, fee recipient, tax treatment and whether the charge is interchange, processing fee or merchant discount rate.
  • Finance Ministry or RBI clarification on consistency with the prohibition on charges for UPI payments up to Rs 2,000 and implications for transactions above that threshold.
  • Payment-aggregator and bank merchant-pricing notices, especially for enterprise and omnichannel retailers.
  • Changes in UPI payment mix above Rs 2,000, authorization success, average ticket size and substitution into cards, net banking, cash or BNPL.
  • Merchant-association lobbying, litigation or coordinated resistance from high-ticket retail sectors.
  • Competitive actions by major retailers and marketplaces on UPI discounts, payment-mode restrictions or checkout routing.
  • Review UPI acceptance contracts and identify whether the 0.4% charge is directly passed through, absorbed, or offset by existing merchant service fees.
  • Segment payment costs by basket size, category, store format and online versus offline checkout; prioritize exposure in transactions above Rs 2,000.
  • Test compliant payment-routing and checkout messaging that promotes lower-cost alternatives without degrading UPI conversion or customer experience.
  • Renegotiate acquiring and payment-aggregator rates using transaction volume, settlement balances, fraud performance and multi-rail routing as leverage.
  • Reforecast gross-margin impact for high-ticket promotions, EMI offers, exchange programs and festive-sale bundles.
  • Monitor whether competitors impose customer-facing surcharges, minimum-spend thresholds, or UPI-specific promotional restrictions.

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