{"id":111635,"date":"2026-08-04T15:52:40","date_gmt":"2026-08-04T15:52:40","guid":{"rendered":"https:\/\/pakistaninewspaperlist.com\/news\/india-paves-way-for-return-of-merchant-fees-on-digital-payments-the-express-tribune\/"},"modified":"2026-08-04T15:52:40","modified_gmt":"2026-08-04T15:52:40","slug":"india-paves-way-for-return-of-merchant-fees-on-digital-payments-the-express-tribune","status":"publish","type":"post","link":"https:\/\/pakistaninewspaperlist.com\/news\/india-paves-way-for-return-of-merchant-fees-on-digital-payments-the-express-tribune\/","title":{"rendered":"India paves way for return of merchant fees on digital payments | The Express Tribune"},"content":{"rendered":"
Industry says UPI’s zero-fee model limits investment, making digital payment growth harder to sustain<\/p>\n
A man uses his phone to scan a QR code of the digital payment app Paytm after purchasing a cold beverage at a shop in Kolkata, India on July 9, 2024. REUTERS <\/p>\n
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India has moved a step closer to reintroducing merchant \u200cfees on transactions made through its popular Unified Payments Interface (UPI) after proposed changes to the country’s payments laws were introduced in parliament on Tuesday.<\/p>\n
UPI, one of the world’s largest real-time payments networks, processed 23.6 billion transactions worth 29.9 trillion rupees ($313.5 billion) in \u200bJuly, according to official data. Walmart’s\u00a0PhonePe and Alphabet’s\u00a0Google Pay dominate payments via UPI.<\/p>\n
Industry executives \u200bhave long argued that growth in digital payments has become harder to sustain because \u2060payment firms earn no fee on UPI transactions, limiting their ability to invest in the ecosystem.<\/p>\n
An amendment to \u200bIndia’s Payment and Settlement Systems Act, tabled in parliament by Finance Minister Nirmala Sitharaman, would allow the introduction of \u200ba merchant discount rate (MDR) on digital payments, according to industry and regulatory sources.<\/p>\n
The sources said the change creates a legal basis for charging an MDR, but no decision has yet been made on the level of fees or where they would apply.<\/p>\n
The \u200bsources declined to be identified because they were not authorised to speak to the media. India’s finance ministry, \u200bcentral bank and national payments authority did not immediately respond to requests for comment.<\/p>\n
An MDR is a fee paid by merchants \u200cto \u2060banks and payments service providers for processing digital transactions. While credit cards in India typically attract an MDR of about 1.5% and debit cards up to 0.9%, UPI transactions are currently free for merchants.<\/p>\n