Overview
India announced on Monday a revision to its payments legislation that maintains free-of-charge status for Unified Payments Interface (UPI) transactions up to 2,000 rupees (approximately $20.93). The amendment modifies an earlier rule that had prohibited banks from levying any fees on digital payments through UPI, and it establishes a framework that could allow banks and payment service providers to impose fees on UPI transfers exceeding the 2,000‑rupee threshold.
Industry Impact
UPI is operated by the National Payments Corporation of India (NPCI). A 2025 International Monetary Fund report identified UPI as the world’s largest retail fast‑payment system by transaction volume. Jefferies estimated in August that merchant fees on larger UPI transactions could generate between 50 billion and 100 billion rupees per year for the payments industry, providing a potential new revenue source for banks and payment companies.
Key Figures
- Free‑of‑charge limit: 2,000 rupees per UPI transaction.
- Potential annual revenue from merchant fees: 50‑100 billion rupees.
- Currency conversion used in the announcement: 2,000 rupees ≈ $20.93.