Archive · 17 Sep 2026
UPI Fee Could Create ₹270 Billion Revenue Pool
India plans to charge some merchants for processing certain UPI payments.
The fee will apply to transactions above ₹2,000 and can be as high as 0.4%.
Bernstein says this could create a large pool of money for banks and other payment companies.
The total revenue pool could reach ₹270 billion each year by fiscal 2028.
Banks may receive about ₹120 billion of the estimated profits.
State Bank of India could be the biggest beneficiary among banks that issue accounts.
Axis Bank and Yes Bank could benefit because they process many UPI payments.
Most of the money involved in merchant UPI payments may be covered because larger transactions represent most of their value.
The estimates describe potential gains, not guaranteed earnings.
Bernstein estimates new UPI merchant fees could create a ₹270 billion annual revenue pool by fiscal 2028.
The fee could generate nearly ₹200 billion in profits for the payments ecosystem, with banks receiving about ₹120 billion.
From October 15, merchants will pay up to 0.4% on UPI transactions above ₹2,000.
State Bank of India could receive roughly 25% of an estimated ₹80 billion issuer-bank pool.
Axis Bank and Yes Bank may benefit from their significant roles in UPI payment processing.
- Who
- Indian merchants, banks, and payment-service providers, with State Bank of India, Axis Bank, and Yes Bank identified as potential beneficiaries.
- What
- A new Merchant Discount Rate on certain UPI merchant transactions is expected to create significant revenue and profit for the payments ecosystem.
- When
- The new fee structure is scheduled to begin October 15, with the revenue pool estimated for fiscal 2028.
- Where
- India, through the Unified Payments Interface network.
- Why
- The fee is intended to compensate banks and other service providers for processing UPI payments.
- Estimated annual revenue pool
- ₹270 billion ($2.8 billion) by fiscal 2028
- Estimated ecosystem profits
- Nearly ₹200 billion
- Estimated bank share of profits
- Around 60%, or ₹120 billion
- Transaction fee
- Up to 0.4% for UPI transactions above ₹2,000
- Maximum fee
- Capped at ₹300 for transactions of ₹75,000 or more
- Largest potential issuer-bank beneficiary
- State Bank of India, with roughly 25% of an estimated ₹80 billion issuer pool
- Large-value transaction share
- Transactions above ₹2,000 represented 67% of merchant-payment value but 4% of transaction volume in August