• Consumer fee exemption: Person-to-person transfers and everyday low-ticket transactions between ₹200 and ₹1,000 remain completely free, with zero charges on small merchants earning under ₹1 lakh monthly.
• Large merchant pricing: A 0.4% charge will apply to UPI transactions at large retail, e-commerce, and mall merchants, which is considerably lower than the 1.6% to 1.8% fees paid on credit cards.
• Infrastructure cost support: The introduction of merchant fees aims to generate necessary revenue for banks and payment companies to sustain high digital payment infrastructure costs as UPI marks 10 years.
• Small vendor impact: Daily store sales above ₹2,000 represent only 5% to 10% of total transactions, ensuring that the 0.4% fee will have minimal impact on small shopkeepers' net earnings.