On March 10, 2026, the National Payments Corporation of India (NPCI) issued a circular revising the fee structure for RuPay Credit Card on UPI transactions, which will go into effect on April 1, 2026.
Paytm (One 97 Communications) has clarified to stock exchanges that while these fees are being reduced, the financial impact on their business will be minimal because their primary revenue comes from merchant-side payments rather than these specific consumer application fees.
Key Changes in Fee Structure
The revision affects the fees paid to Third Party Application Providers (TPAPs)—like Paytm, PhonePe, and Google Pay—and Payer Payment Service Providers (PSPs) from the issuer interchange.
| Category | Previous Fee (bps) | Revised Fee (bps) | Total Reduction |
|—|—|—|—|
| Non-Industry | 8 basis points | 6 basis points | 2 basis points |
| Industry | 4 basis points | 3 basis points | 1 basis point |
Important Details
* Split Distribution: The total fee is typically split equally. For example, in the Non-Industry category, the 12 basis points total from the issuer interchange is split as 6 bps for the Payer PSP and 6 bps for the App.
* What is “Industry”?: This generally includes specific sectors like utilities, education, agriculture, and government services, which often have lower capped rates.
* No Impact on Users: These are backend “interchange” splits between the companies involved in processing the payment. As a consumer, you will not be charged any extra fees for using your RuPay credit card on UPI.
* Exclusions: This revision does not apply to small offline merchant transactions (up to ₹2,000), EMI transactions, or AutoPay mandates, which follow separate existing circulars.
The 2026 RuPay-UPI Fee Shift: What Consumers and Fintechs Need to Know
In a strategic move to refine the backend economics of India’s booming digital credit landscape, the National Payments Corporation of India (NPCI) issued a pivotal circular on March 10, 2026. This update revises the fee structure for RuPay Credit Card transactions on UPI, effective April 1, 2026.
While the move sparked immediate discussions in the stock market—particularly regarding Paytm—the “fine print” reveals a calculated effort to balance the interests of banks, payment apps, and essential industry sectors.
1. The Core Changes: Trimming the “Slices”
The revision focuses on the interchange split—the backend fee paid by the card-issuing bank to the payment apps (like Google Pay, PhonePe, and Paytm) and the technical service providers.
The fees are categorized into two buckets: Industry and Non-Industry.
| Category | Previous Fee (to Apps) | Revised Fee (to Apps) | Total Backend Split (App + PSP) |
|—|—|—|—|
| Non-Industry | 8 basis points (bps) | 6 basis points | 12 bps (6 each) |
| Industry | 4 basis points (bps) | 3 basis points | 6 bps (3 each) |
2. Defining “Industry” vs. “Non-Industry”
The “Industry” tag is reserved for essential services where the government and NPCI aim to keep costs lowest to encourage digital adoption.
* Industry: Includes Utilities (Electricity, Gas, Water), Education (Fees), Agriculture, and Government services (Taxes/Fines).
* Non-Industry: Covers the broader retail world, including E-commerce, Fashion, Dining, Electronics, and Professional services.
3. The Paytm Clarification: “Business as Usual”
Immediately following the circular, One 97 Communications (Paytm) informed stock exchanges that the financial impact would be immaterial. The reason? Most fintech giants derive their primary revenue from Merchant MDR (fees paid by the merchant) rather than these small backend “consumer application fees.”
Paytm noted that their processing margins remain robust (comfortably above 4 bps), as high-margin products like EMI and merchant-side RuPay acquisitions are not affected by this specific revision.
4. User Impact: Is it Still Free?
For the everyday consumer, the answer is a resounding Yes.
* Zero Fees for Users: You will not see a surcharge on your bill for using a RuPay Credit Card on UPI.
* The ₹2,000 Rule: Transactions at small offline merchants (up to ₹2,000) remain exempt from these interchange structures, ensuring small “Kirana” stores aren’t burdened.
* Exclusions: This update does not apply to EMI conversions or AutoPay mandates, which follow their own separate commercial agreements.
5. Maximizing Your Spend: 2026’s Top RuPay Cards
Despite the lower backend fees, banks are still competing for your “UPI Swipe.” Since “Industry” categories (like bills and school fees) now have lower backend costs, some cards are specifically tailored to reward these spends:
* HDFC Bank UPI RuPay: High reward points for Grocery and Utility (Industry) categories.
* Kiwi RuPay: Offers a flat 1.5% to 5% cashback on UPI transactions via their app.
* Axis SuperMoney: Native integration offering up to 3% cashback on QR spends.
* IDFC FIRST HPCL Power+: Optimized for 5% savings on fuel and utility bills.