Archive · 16 Sep 2026
NITI Vice-Chairman Defends New UPI Merchant Transaction Fee
The government plans to charge some businesses a small fee when customers pay them through UPI.
The fee will be 0.4 per cent for merchant payments above Rs 2,000.
It will begin on October 15.
Sending money from one person to another will still be free.
Small payments will also remain free.
Ashok Kumar Lahiri said businesses need ways to support themselves without government subsidies.
He said 40 paise would be charged on a Rs 100 transaction under the example discussed.
He compared the fee to a bee collecting honey gently from a flower.
He also said small charges, such as those for cheque books, are a normal part of business.
NITI Aayog Vice Chairman Ashok Kumar Lahiri defended the government’s decision to charge merchants for some UPI transactions.
A 0.4 per cent fee will apply from October 15 to merchant UPI transfers above Rs 2,000.
Everyday person-to-person transfers and small UPI payments will remain free.
Lahiri said a Rs 100 transaction would cost 40 paise and argued that businesses should become self-sustaining without subsidies.
He quoted Chanakya’s comparison of gentle taxation to a bee collecting honey from flowers.
- Who
- NITI Aayog Vice Chairman Ashok Kumar Lahiri and the government; merchants using UPI are affected.
- What
- The government introduced a 0.4 per cent charge on certain UPI merchant transactions.
- When
- The fee will begin on October 15; Lahiri defended it on Wednesday.
- Where
- New Delhi.
- Why
- Lahiri said the charge would help sustain businesses without relying on subsidies.
- Fee rate
- 0.4 per cent
- Affected payments
- UPI transfers above Rs 2,000 made to merchants
- Start date
- October 15
- Exempt payments
- Everyday person-to-person transactions and small payments
- Example cited
- A Rs 100 transaction would incur a 40-paise charge
- Government rationale
- Supporting self-sustaining businesses without subsidies
- Reference used by Lahiri
- Chanakya’s comparison of taxation to a bee collecting honey gently