India is introducing 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 won't be passed to customers. Smaller UPI payments keep their no-fee status.

The change only affects larger payments. It marks a departure from the current no-fee structure. The new rate applies only to payments that surpass the Rs 2,000 mark. Consumers are not charged the fee, according to reports. The fee applies to payments from people to merchants, not to all UPI transactions.

The government and the central bank have weighed the move for some time. The idea is to make large digital payments sustainable. Banks and payment firms have pushed for such a charge. The current system has no fee for most UPI payments. A fee on larger merchant payments could reshape the market. The reported rate is below earlier estimates. It remains unclear how quickly the charge will roll out. Consumers using UPI for small purchases face no extra cost.