New UPI Merchant Fee Could Lift Effective Cost to 47.2 bps After GST
India’s new UPI merchant discount rate framework, effective October 15, introduces a 0.4% charge on person-to-merchant transactions above Rs 2,000, with a cap of Rs 300 on payments of Rs 75,000 and above. While consumers will not be charged, the GST treatment of the fee could raise the effective cost for merchants to about 47.2 basis points, sharpening concerns across retail, mobility and other high-frequency payment sectors.
