UPI payments above Rs 3000 may soon attract fees: Big change proposed by Govt
By Mehak Arora
New Delhi, June 11, 2025:A significant update may soon impact millions of Indians using UPI for digital payments.According to sources, the Central Government is considering a proposal to introduce a Merchant Discount Rate (MDR) — a small fee — on UPI transactions above ₹3000. However, smaller transactions under ₹3000 will continue to remain free.
Why This Change?
With over 80% of retail digital transactions now taking place through UPI, banks and payment providers are struggling with rising operational costs. Since 2020, the total value of UPI-based merchant payments has crossed ₹60 lakh crore, making it increasingly difficult to maintain the infrastructure without any revenue.
What Is Being Proposed?
The Payments Council of India (PCI) has proposed an MDR of 0.3% on large merchants, i.e., businesses with high transaction volumes.
For context, current MDR rates for debit and credit cards range between 0.9% and 2%. Importantly, no charges will be applied on RuPay credit cards for now.
Implementation Timeline
No final decision has been taken yet. The government is expected to decide within the next 12 months, after holding consultations with banks, fintech companies, and the National Payments Corporation of India (NPCI).
Why It Matters
UPI has played a central role in making India the global leader in digital payments, largely due to its free and seamless structure.But industry experts argue that charging a small fee on high-value transactions will help make the system more sustainable by allowing banks and fintechs to invest in better technology and infrastructure.
As discussions continue, UPI users are advised to stay updated and be prepared for possible changes in how digital payments are handled in the near future.