'Fear of shift to cash due to merchant fee on UPI 100% misplaced': Government sources

The government reassures that fears of consumers shifting back to cash due to a 0.4% merchant fee on UPI transactions over Rs 2,000 are unfounded, highlighting that merchant discount rates exist on other payment methods without causing such shifts. The fee will help offset the costs of UPI infrastructure, which currently exceeds revenues, while the government plans to monitor and prevent merchants from passing the fee onto consumers.

This Wire brief sits within Fusion42's coverage of Fintech.