Walmart-backed PhonePe and Google Pay could gain about $900 million a year from India’s decision to introduce merchant fees on UPI (Unified Payments Interface), the country’s widely used digital payments network. Regulators have permitted a 0.4% merchant discount rate, or MDR (fee charged to merchants), on transactions exceeding 2,000 rupees ($21), effective October 15. Bernstein estimates the fee could generate as much as $1.1 billion annually for payment apps by March 2028, with the two leading platforms receiving roughly $900 million based on their combined 80% share of UPI payment values last month. The revenue could make expansion into rural India more commercially viable and support additional financial products, while smaller competitors are expected to pursue ticketing, business payments, utility bills and credit. The change ends UPI’s six-year period as a free network and brings it closer to international payment systems that charge merchants. It has also raised concerns about market concentration, indirect costs for consumers and whether merchants could shift some business back toward cash, although the central bank, Bernstein analysts, industry executives and merchants contacted by Reuters said a broad return to cash was unlikely.