India's UPI Payment Network to Introduce Merchant Fees from October 15, 2026

India's Unified Payments Interface (UPI) is introducing fees for merchants from October 15, 2026. The Reserve Bank of India has allowed fees of up to 0.4% on transactions worth more than 2,000 rupees ($21).

This change will benefit PhonePe and Google Pay the most, as they account for about 80% of UPI's value in August. According to Bernstein analysts, the new fee could generate up to $1.1 billion in annual revenue for payment apps by March 2028.

PhonePe's co-founder Rahul Chari sees this as a positive step that will help offset significant operating costs and obligations. The new revenue stream may also encourage companies like PhonePe and Google Pay to expand into rural areas, where payments are generally smaller but transaction data could be used for targeted loans and financial products.