India may introduce a fee on large Unified Payments Interface (UPI) transactions to sustain the payments network. The proposal would apply a merchant discount rate of 0.3‑0.5% on transactions above 2,000 rupees at larger merchants, affecting roughly 4% of transaction volume but about 67% of their value, potentially generating up to $1 billion in new revenue for banks and payment firms. Consumers and person‑to‑person transfers would remain free. The plan follows research indicating that a dense network of merchants has been a key driver of UPI’s rapid growth, with higher adoption in districts where merchant acceptance is stronger. Economists warn that extending fees to small or informal merchants could hinder further expansion, especially in less‑developed regions where merchant networks are still thin. The Reserve Bank of India has noted that the cost of operating the system must be covered, and the pricing structure will determine how that burden is distributed. A 2024 survey found that 75% of UPI users would cease using the service if fees were introduced, highlighting a potential perception risk. Brazil’s Pix system, which charges low fees to businesses while keeping individual transactions free, is cited as a comparable model. The upcoming decision will test whether the network can remain financially viable without compromising the broad adoption that has made UPI one of the world’s largest real‑time payment systems.