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India’s Unified Payments Interface network will charge merchants a 0.4% fee for some payments exceeding 2,000 rupees, while consumers will continue using the service for free. The move represents a shift from the full-fee waiver model in place since 2020, aimed at funding the network’s operations and security and expanding its infrastructure.
New Indian legislation lays the legal groundwork for potentially imposing fees on some merchant payments through the UPI network, after these payments remained free since 2020. The legislation does not specify the fees or covered transactions, but estimates suggest it could generate up to $1 billion annually by fiscal year 2028.
Dilip Asbe, chief executive of NPCI, which oversees the UPI system, believes artificial intelligence will be central to attracting new users, combating fraud, and expanding access to credit as India seeks to surpass one billion daily transactions. He also called for clear regulatory frameworks to adopt AI-backed finance and for the development of specialized small language models within the country’s financial sector.