India Plans to End 6-Year Fee Waiver on UPI Payments

India is considering reintroducing a Merchant Discount Rate (MDR) of up to 0.5% on UPI transactions exceeding ₹2,000 after six years of zero fees, affecting only 4% of transactions while exempting micro-enterprises with sub-₹15m annual turnover. The move aims to address a funding gap where current government subsidies cover only 11-14% of actual infrastructure costs. If you process UPI payments in India above ₹2,000, your customer acquisition cost just went up 0.5% on those transactions — but this creates an opening: sub-₹15m turnover micro-merchants are now permanently exempt, so you can build a compliance-lite product for that segment and own a market the incumbents must charge.