India’s fintech leaders support model to charge large merchants on UPI while keeping consumer transfers free

Chief executives of PhonePe and Razorpay back proposed charges for large merchant transactions over UPI to ensure network sustainability, while emphasising that everyday consumer transfers should remain free.

Chief executives at two of India’s best-known fintech firms have thrown their support behind a proposal to levy charges on certain large merchant transactions conducted over the unified payments interface, while insisting that ordinary consumers should continue to use the system without paying fees. Sameer Nigam of PhonePe and Harshil Mathur of Razorpay are backing a model pushed by the Payments Council of India, which wants to preserve free everyday transfers but make room for charges on selected commercial payments so the network remains financially sustainable.

The argument is not that UPI should cease to be a low-cost rail for the public, but that the economics of handling high-volume merchant traffic may need to be shared more broadly. Razorpay’s own pricing and guidance distinguish between consumer-facing bank-to-bank UPI payments, which carry no merchant discount rate, and other fee structures that may apply depending on the payment type and integration. The company says its platform fee can apply even where the underlying UPI transfer itself remains free at the consumer end.

PhonePe has taken a similar line in its terms and public statements, saying users are not charged for UPI account creation or UPI transactions, while retaining the ability to revise its fee policy. That leaves room for a differentiated approach in future, particularly for larger merchants. The debate comes as the industry weighs how to keep UPI’s rapid growth from colliding with the need for a viable commercial model, especially for payment firms that process transactions at scale.