UPI Transaction Charges


Starting April 1, 2023, the National Payments Corporation of India (NPCI) will increase the interchange fee for Unified Payments Interface (UPI) transactions above Rs. 2,000 made by merchants.

The interchange fee is the fee charged by the UPI service provider to banks for the processing of transactions. This fee is usually passed on to the merchants.

What is Interchange Fee?

As per the new fee structure, UPI transactions above Rs. 2,000 made by merchants will carry a charge of 1.1%, up from the current 0.5% fee.

New UPI Transaction Charges

Merchants will now have to bear the increased interchange fee, which will affect their profitability. Small merchants and startups may find it challenging to absorb the higher transaction costs.

Impact on Merchants

NPCI expects to earn additional revenue of Rs. 1,000 crore per year from the increased interchange fee. This revenue will be used to support the development of new digital payment services.

Benefits of NPCI

The increase in the UPI interchange fee for merchant transactions above Rs. 2,000 is a significant development in the Indian digital payments landscape. While it may benefit the NPCI, small businesses and startups may face challenges due to the increased transaction costs.