India is moving toward fees on large UPI payments. A merchant discount rate of 0.4% will kick in for some person-to-merchant payments above Rs 2,000. Reports say the fee will not hit consumers. Smaller UPI payments stay free of charge.

The change focuses only on bigger transactions. It marks a shift from the current no-fee structure. The new rate applies only to payments that surpass the Rs 2,000 mark. Consumers are not charged the fee, based on current reporting. The fee applies to transactions between customers and businesses, not to all UPI transactions.

The government and the central bank have been discussing the move for some time. The idea is to cover the cost of big digital transactions. Banks and payment firms have pushed for such a charge. The current system has a zero-cost model for most users. A fee on larger merchant payments would alter the landscape. The reported rate is lower than some had expected. It remains unclear when the fee will start. Consumers using UPI for small purchases will see no difference.