Bernstein Research indicates that the introduction of fees on India's domestic digital payments network is projected to generate an annual revenue pool of 270 billion rupees, equivalent to $2.8 billion, by the fiscal year 2028, with banks likely securing the largest profit share. In a report, analysts including Pranav Gundlapalle noted that among issuing banks, State Bank of India is expected to benefit the most, while Axis Bank and Yes Bank stand out as payment service providers due to their substantial transaction volumes.

The merchant discount rate, which is the fee merchants pay to banks and other service providers for processing transactions, will apply to payments made through India's Unified Payments Interface (UPI). Bernstein estimates this policy could generate nearly 200 billion rupees in profits for the payments ecosystem, with banks retaining approximately 60%, amounting to 120 billion rupees. The analysts wrote, "In other words, the entire industry will add profits equivalent to the annual size of Kotak Mahindra Bank each year, and the profit pool is expected to sustain a growth rate of around 20% in the coming years."

Starting from October 15, merchants face a maximum fee of 0.4% for UPI transactions above 2,000 rupees, with a cap of 300 rupees on transfers of 75,000 rupees or more. This charge, based on transaction value, applies to the vast majority of UPI merchant payments. Data from the National Payments Corporation of India shows that in August, transactions exceeding 2,000 rupees accounted for only 4% of total transaction volume, but represented 67% of the total value of consumer-to-merchant payments.

Bernstein states that this fee policy is expected to boost overall banking system profits by approximately 3%, though the distribution of benefits is likely to be highly uneven. Leveraging its extensive savings account base, State Bank of India is anticipated to capture about 25% of the 80 billion rupee issuer-side revenue pool. Meanwhile, Axis Bank and Yes Bank have UPI transaction processing volumes that significantly exceed their traditional banking market shares. The report notes that final actual benefits will depend on the composition of merchant and person-to-person transfer transactions, as well as the eventual revenue-sharing arrangement with major payment platforms.