India's UPI Payment System to Start Charging Merchants a Fee

The Indian government's unified payment interface (UPI) will no longer be free for all. Starting next month, merchants will need to pay a fee of 0.4% on payments above $20.

The decision has sparked an intense debate in the country. Critics argue that charging merchants for UPI services is unnecessary and could lead people to return to cash transactions.

The government has defended the move, saying it will not hurt India's march towards a cashless economy. However, Prime Minister Narendra Modi's political rivals have accused the government of favoring US firms, such as PhonePe and Google Pay.

UPI processes over 1.1 million transactions every two minutes on average. It has surpassed Visa in terms of daily transaction volumes and accounts for 85% of digital payments in India and 50% globally.