New UPI framework keeps personal transfers free and introduces targeted merchant fees
The Finance Ministry estimates that about 96% of merchant transactions remain unaffected by the revised payment framework.
The Finance Ministry says all person-to-person UPI transfers will remain free. Merchant payments up to ₹2,000, along with qualifying receipts by small merchants, also remain at zero merchant discount rate.
Specified merchant transactions above ₹2,000 attract a 0.4% fee, capped at ₹300 for transactions of ₹75,000 or more. Selected essential sectors use a flat ₹5 charge. The ministry estimates that about 96% of person-to-merchant transactions are unaffected and says the fee should not be passed to customers.
Why it matters
The framework changes payment economics for some larger merchant transactions while protecting consumer transfers and most small-ticket merchant payments.
SCULTRA point of view
The central question is whether targeted merchant fees sustain banks and payment providers without weakening small-merchant adoption or creating indirect customer charges and fragmented acceptance.
Limitations
The release provides a policy summary but not transaction-volume modelling, implementation monitoring, merchant-compliance data, impact on incentives or evidence that pass-through restrictions will be consistently enforced.
Source: Press Information Bureau / Ministry of Finance, 15 September 2026, 6:45 PM IST.