UPI Merchant Fee Reform Gains Traction

India is considering allowing merchant fees on higher-value UPI transactions (above ₹2,000), following Parliament's amendment to the zero-MDR law. The proposal could generate ₹10,000-12,000 crore annually for banks, but faces pushback from small merchants and concerns over digital adoption. The move is a significant regulatory shift for the payment ecosystem, with implications for bank profitability, financial stability, and fiscal subsidy costs. Industry reactions are mixed, with large banks supporting and fintechs warning of impact on rural adoption.