India consults banks, payment firms on fees for large UPI payments, sources say

India is about to break UPI's defining feature — zero merchant fees — for transactions above ₹2,000.

The government consulted banks and payment firms today on a tiered interchange model. Why now? UPI clocked 16.6 billion transactions in August 2026, and the cost of subsidizing that volume is pushing banks to the edge. They want compensation; merchants fear margin erosion.

This isn't just a pricing tweak. It rewrites the economics of digital payments in regulated infrastructure — and tests whether volume subsidies can ever scale without breaking the balance sheet.

The deck walks through the mechanism, the stakeholders, and what happens when policy catches up to infrastructure reality.

#DigitalTransformation #EnterpriseArchitecture #PaymentSystems #RegTech #CriticalInfrastructure

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