Opinion · Payments
The free-UPI era was always borrowed time
Charging merchants was inevitable once volumes turned the rails into critical national infrastructure.
The Desk, Editorial··4 min read
Fourteen years of zero MDR produced habit, inclusion and a payments stack that rivals anything built elsewhere. It also left the operators and banks carrying the cost of 20-plus billion monthly transactions while two foreign-linked apps captured the bulk of consumer attention.
A modest, tiered fee on larger merchant payments is not the end of the miracle. It is the price of keeping the system solvent and open to domestic innovation. The danger lies in design: any structure that hits the Rs 200 kirana ticket will simply push those flows offline again.
Free forever was never a business model; it was industrial policy that succeeded too well.
Quick commerce and marketplace checkouts that live on high-frequency, low-value UPI will lobby hardest for exemptions or rebates. They should not get a free pass forever; their unit economics already assume cheap digital rails.
Regulators must publish clear thresholds, sunset clauses for any small-merchant waiver, and a public cost-recovery model. Opacity will only breed the next round of workarounds and political pushback.