India considers transaction fees for large UPI merchants

The Indian government is considering introducing transaction fees for large merchants using the Unified Payments Interface (UPI). This move aims to ensure the long-term sustainability of the system and recover operational costs a decade after its inception.

According to government data, UPI transaction volume has grown significantly from 17.8 million in 2016-17 to 241.62 billion in the 2025-26 fiscal year. The value of these transactions rose from 7,000 crore rupees to 3.14 lakh crore rupees during the same period.

Establishing a predictable revenue stream is expected to encourage banks and payment companies to invest more heavily in cybersecurity, fraud detection, and dispute resolution. It may also facilitate the next phase of UPI development, including the expansion of cross-border payments and the provision of credit lines. The UPI network currently operates in 11 countries, including Singapore, the UAE, France, and Mauritius.