India is opening the door to fees on large UPI payments. A merchant discount rate of 0.4% will apply to some person-to-merchant payments above Rs 2,000. Reports say the fee will not hit consumers. Smaller UPI payments remain free.

The change only affects larger payments. It marks a change from the current no-fee structure. The new rate applies only to qualified transactions over Rs 2,000. Consumers are not charged the fee, as reports indicate. 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 support the payments ecosystem. Banks and payment firms have long asked for such a charge. The current system has no fee for most UPI payments. A fee on larger merchant payments would change that. The reported rate is lower than some had expected. It remains unclear how quickly the charge will roll out. Consumers using UPI for small purchases should not notice any change.