Archive · 16 Sep 2026
Traders Oppose New UPI Fees on Merchant Payments
The government has introduced a new fee for some UPI payments made to businesses.
The fee applies when a merchant transaction is more than Rs 2,000.
It will be charged to the merchant, not directly to the customer.
The fee is 0.4% of the transaction.
It cannot be more than Rs 300 for transactions of Rs 75,000 or more.
Small merchant payments and person-to-person transfers will stay free.
Ramesh Khandelwal, a traders' board member, wants the government to cancel the fee.
He says it could make business more difficult and might lead to higher prices.
He plans to raise the issue at the board's next meeting.
The Centre introduced a 0.4% merchant discount rate on UPI merchant transactions above Rs 2,000 from October 15.
National Traders' Welfare Board member Ramesh Khandelwal urged the government to withdraw the fee.
Khandelwal said the charge conflicts with ease-of-doing-business policies and could hurt business growth.
Merchants, rather than consumers, will pay the fee, which is capped at Rs 300 for transactions of Rs 75,000 or more.
Person-to-person transfers and merchant UPI payments up to Rs 2,000 will remain free.
- Who
- The Centre, merchants, consumers, and Ramesh Khandelwal, a National Traders' Welfare Board member, are involved.
- What
- A 0.4% merchant discount rate has been introduced for UPI merchant transactions above Rs 2,000.
- When
- The new fee is scheduled to begin on October 15; Khandelwal spoke about it on Wednesday.
- Where
- The policy applies to UPI merchant transactions in India; Khandelwal represents Madhya Pradesh on the National Traders' Welfare Board.
- Why
- The Centre introduced the fee under a new framework, while Khandelwal is seeking its withdrawal because he says it could harm business growth and conflict with ease-of-doing-business policies.
Opposition to the Fee
Government Framework
Effect on businesses
Opposition to the Fee
Ramesh Khandelwal says the fee violates ease-of-doing-business policies, could hurt business growth, and may lead to higher prices.
Government Framework
The Centre's framework imposes the fee on merchants while keeping small merchant payments and person-to-person UPI transfers free.
Who should bear the charge
Opposition to the Fee
Khandelwal is calling for the fee to be withdrawn in the interests of consumers and businesses.
Government Framework
Under the new framework, the charge is assigned to merchants rather than consumers and is capped at Rs 300 for transactions of Rs 75,000 or more.
- Fee rate
- 0.4% merchant discount rate
- Threshold
- Applies to merchant UPI transactions above Rs 2,000
- Payer
- Merchants, not consumers
- Maximum charge
- Rs 300 for transactions of Rs 75,000 or more
- Exemptions
- Person-to-person transfers and merchant transactions up to Rs 2,000 remain free
- Effective date
- October 15
- Advocacy
- Ramesh Khandelwal plans to raise the issue at the upcoming National Traders' Welfare Board meeting