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 departure from the current no-fee structure. The new rate applies only to qualified transactions over Rs 2,000. Consumers are not charged the fee, based on current reporting. The fee applies to person-to-merchant payments, not to all UPI transactions.

The government and the central bank are considering 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 no charge on most UPI transactions. A fee on larger merchant payments would alter the landscape. The reported rate is below earlier estimates. It remains unclear when the fee will start. Consumers using UPI for small purchases should not notice any change.